What is EPLI Insurance? 

Businesses are exposed to specific employment-related risks anytime they hire workers. Allegations of discrimination and unfair treatment can have serious consequences for a business, and almost any employee could file a lawsuit making such allegations. To help protect against such employment risks, Texas businesses can get EPLI insurance.

EPLI insurance is designed specifically for businesses with employees. Policies may help defend against many discrimination and other claims that employees could make.

As normally true with commercial liability policies, EPLI policies are likely to pay qualifying legal defense fees, court fees and settlements if there’s a covered lawsuit filed against a business.

What Texas businesses should carry employment practices liability insurance? 

The vast majority of employers in Texas should have employment practices liability insurance. It takes just one employee to file a discrimination lawsuit or claim.

In fact, it’s often wise for businesses to get an EPLI policy shortly before hiring their first employee. An applicant could potentially allege that they weren’t hired due to discrimination, and this is another type of claim that EPLI might help protect against.

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What incidents does employment practices liability insurance typically cover?

Employment practices liability insurance addresses multiple situations where employers may face discrimination or similar claims. While policy details can differ, coverage generally extends to instances like:

  • Unpaid interns perform tasks for which other employees are paid
  • Compensation rates between female and male employees differ
  • Racial minority employees receive many tasks below their role
  • Job applicants are asked about pregnancy or immigration status
  • Job applicants aren’t told about background checks before they’re run
  • Older employees are unfairly terminated because of their age
  • LGBTQ+ employees aren’t offered the same opportunities as other employees
  • Employees report an overall hostile work environment

Because the exact scenarios that a policy covers can vary, it’s important to review a specific EPLI policy’s protections with an insurance agent who specializes in this field.

Do EPLI policies extend coverage to claims made by volunteers?

While it may be less common, volunteers sometimes raise concerns much like those of employees. Volunteers could allege discrimination based on gender, ethnicity, age, orientation or other grounds, and many volunteer organizations are held to similar standards as employees are for these issues.

Some EPLI policies may cover claims made by volunteers, but not all necessarily do. Volunteer organizations that want to make sure such claims are covered should work with a specialized insurance agent to find a suitable policy.

Is employee discrimination covered by general liability insurance? 

General liability insurance covers common business risks, but these tend to mostly be “slip and fall” accidents, similar accidents, defamation and false advertising. General liability normally doesn’t include protection for employment discrimination claims.

Is employee discrimination covered by workers compensation insurance? 

Workers’ compensation mainly covers various workplace injuries and illnesses. It normally doesn’t cover discrimination claims made y employees.

For employee discrimination claims and lawsuits, EPLI is usually needed.

Do EPLI policies provide protection against third-party discrimination claims? 

In addition to allegations from employees and volunteers, businesses might also be alleged of discriminating against third parties. Suppliers, contractors, clients or customers could claim they were discriminated against in certain situations.

Many EPLI policies won’t automatically cover third-party claims as a standard protection. Some select policies may offer this protection as an add-on option that employers can choose, however. If such coverage is needed, a knowledgeable agent can check which policies have an option for third-party claims.

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Are claims of FMLA breaches covered by EPLI policies? 

Allegations that a business violated the Family Medical Leave Act (FMLA) are often covered by EPLI policies. For example, a father being required to work before his FMLA is over might sue. This sort of lawsuit would likely be covered.

Most EPLI policies also cover employment-related claims related to the Fair Labor Standards Act (FLSA) or the Occupational Safety and Health Act (OSHA). Coverage isn’t necessarily guaranteed in every policy, however, so it’s important to review any specific policy’s terms and conditions.

Where can Texas businesses find EPLI insurance? 

If you’re a Texas employer that needs EPLI insurance, contact the independent insurance agents at Wise Insurance Group. We have the expertise to help you select the best policy for your business, and can show you the best policy regardless of what insurance company is offering it.

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