Often confused with D & O and E & O insurance, EPLI (Employment Practices Liability Insurance) is a bit different in that coverage is for employers against claims made by employees who sue a business for violating their legal rights.
Employment Practices Liability Insurance can shield you from some of the extreme legal expenses involved in litigation. Obtaining an EPLI insurance policy can guard you against these common lawsuit claims.
• Wrongful dismissal - A wrongful dismissal occurs when an employer releases an employee from their duties in a wrongful and illegal manner according to that employee's rights. Wrongful dismissal examples range from age discrimination, sexual harassment, breach of contract, defamation of character, etc.
• Sexual harassment - Sexual harassment can fall under several different categories. One of those categories creates a situation wherein an employee feels if they balk against sexual innuendos in the form of unwelcome sexual advances whether verbal or physical, their jobs will be in trouble. They may be at risk of losing their job or not getting a raise or promotion. Another type of sexual harassment is one where the employee can not perform his or her tasks to full capacity or the environment surrounding the employer and employee becomes unstable.
• Defamation of character - Defamation of character may take place if an employer makes an untrue statement that is harmful to the employee. This can be as a verbal or written statement.
• Breach of Contract - More often than not, a breach of contract will occur under the spectrum of a union and one of its employees. There are requirements under which the guidelines must be met for the proper dismissal of an employee. If an employee disagrees with their dismissal and believes it to be against their union contract, they may then follow up with a grievance. If the grievance is not satisfactorily met on behalf of the employee, that employee may pursue costly legal actions against the employer.
• Failure to promote - Failure to promote can occur if an employee has justified and valid complaints wherein others are being promoted and they are not being promoted. The employee believes there is some other reason, other than work performance for this occurring on behalf of the employer.
• Race discrimination - Race discrimination can occur if an employee is fired due to their religious beliefs or ethnic background.
As you can clearly see being an employer today is akin to walking on a tight rope when it comes to the possibility of experiencing a lawsuit from one of your employees.
Obtaining EPLI for your company will defray the costs of a damaging lawsuit that may negatively affect your operation. You have worked hard to establish your company, why not protect it to the maximum. Purchasing an Employment Practices Liability Insurance policy is a smart business decision.
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