Employment Practices Liability Insurance

What Is Covered under Employment Practices Liability Insurance

Investigation, defense and settlement when claimants allege wrongful termination, discrimination, harassment and violation of certain state and federal acts/laws.

What Is Not Covered under Employment Practices Liability Insurance

  • Physical injury – except certain injuries arising from emotional distress
  • The following federal acts: ERISA, COBRA, WARN, NLRA, FSLA **
  • Violation of state, federal or foreign wage and hour laws **
  • Breach of employment contracts (except those implied to all employees)
  • Past litigation or litigation that is pending at policy inception
  • Social Security and Unemployment Insurance laws/benefits
  • Workers’ Compensation and Disability laws/benefits

      **Allegations of employer retaliation against claimants under these acts is covered

Valuable Coverage Enhancements To Request for your Employment Practices Liability Insurance

  • Investigation and defense costs in addition to (not part of) the policy limit
  • Claims arising from (unknown) acts that took place before policy inception
  • Claims from and against third parties – such as customers, vendors, etc…
  • Claims arising from violations of wage and hours laws
  • Defense of criminal charges alleging the hiring of illegal aliens
  • Policyholder’s consent to settle allegations

Cost of Employment Practices Liability Insurance

Premiums are primarily based on the type of industry, number of employees, frequency of turnover, existence of human resources materials (such as an Employee Handbook), employee orientation/training, written procedures and hiring/termination protocol.

Generally speaking, annual premiums start at $1,500 and don’t usually exceed $10,000 until there are 200 or more employees.

What Is Needed For A Premium Indication

  • Type of Industry
  • # of full-time and #of part-time employee
  • Average % of employee turnover
  • Do you have an Employee Handbook?
  • Any past employee allegations (if so, brief details)