You’re Liable: Trends in EPLI Claims for 2020

Available either on its own or as part of a package policy, employment practices liability insurance (EPLI) protects against employee lawsuits alleging inappropriate or unfair acts – any one of which can bring a business to its financial knees.

Any employee – whether former, current or potential – can file suit if he or she asserts that the employer has violated any of an assortment of legal rights.  Examples include:

  • Sexual harassment. Those accused can be senior managers, supervisors, co-workers or even non-employees.
  • Discrimination. Defined as unfair treatment based on religion, age, ethnicity, gender, disability, skin color, sexual orientation or race.
  • Wrongful termination. According to the Equal Employment Opportunity Commission (EEOC), this is the most common claim brought against employers.

Most EPLI policies will reimburse a company for the costs of defending a lawsuit in court, as well as for judgments and settlements. The policy usually covers legal fees, regardless of the suit’s outcome.  With respect to Wage and Hour coverage, most coverage endorsements provide “Defense only” at a sublimit between $100,000 and $500,000.  Damages usually consist of back wages, overtime pay etc., which fall to the employer to pay, not the insurance company.

Some of the most prevalent EPLI-related claims seen in 2020 include:

Retaliation Claims on the Rise – More than half of EEOC claims filed in recent years have involved claims of employer retaliation against an employee.

The #MeToo Movement Leads to Increases in Sexual Harassment Claims – These types of cases represent roughly one-third of all EEOC claims files, including a steady rise in LGBT-based charges.

The Gig Economy Leads to More Wage and Hour Litigation – Fair Labor Standards Act lawsuits have risen dramatically, mostly involving worker classification disputes.

The Gender Pay Gap Remains – The U.S. Bureau of Labor Statistics states that women working at full-time salaried jobs earn 81% of what men earn.

Marijuana Legalization Having an Increased Impact – At least 11 states permit recreational marijuana, with more allowing medical marijuana, as of January 2020.

It’s vital to know that EPLI policies are not all-encompassing. The costs of an employee lawsuit can be emotionally and financially devastating, with the average cost to defend and settle a case averaging $160,000.

Understand your EPLI coverage.  Get advice on steps to avoid some of the trends identified here.  The professionals at The Reschini Group can help.  Contact them today.

Copyright 2020 The Reschini Group

The Reschini Group provides these updates for information only, and does not provide legal advice.  To make decisions regarding insurance matters, please consult directly with a licensed insurance professional or firm.


Make No Mistake: Best EPLI Coverage Gained as a Standalone Policy

You can’t be kind of pregnant.  You can’t be kind of deceased.  With some of life’s developments, you really don’t have a choice.  It’s all or nothing.

But in others, the choice remains open – yet, it might be best to go all-in anyway.  Such is the advice of professionals when it comes to Employment Practices Liability Insurance, or EPLI.

The International Risk Management Institute defines EPLI as: “A type of liability insurance covering wrongful acts arising from the employment process. The most frequent types of claims covered under such policies include: wrongful termination, discrimination, sexual harassment, and retaliation. In addition, the policies cover claims from a variety of other types of inappropriate workplace conduct, including (but not limited to) employment-related: defamation, invasion of privacy, failure to promote, deprivation of a career opportunity, and negligent evaluation. The policies cover directors and officers, management personnel, and employees as insureds.”

Coverage can be issued through an addendum to a General Liability policy or as a separate endorsement.  EPLI also typically carries a warranty covering whether the policyholder is aware of any workplace issues related to harassment, discrimination, or any of the other issues cited in the definition above.

EPLI issued as a full standalone policy remains the preferred method, since the policy is designed to provide a more robust coverage with separate limits from the General Liability form.  Regardless of how you purchase it, having EPLI coverage is highly recommended.

There are some instances where it’s smart to go all-in, even when you have the option to take a smaller, easier course.  But don’t be fooled.  Be smart.  Be covered fully.  EPLI is one of those instances.

Contact the team of professionals at the Reschini Group for more information on how an EPLI policy can help protect your organization.

Copyright 2019 The Reschini Group

The Reschini Group provides these updates for information only, and does not provide legal advice.  To make decisions regarding insurance matters, please consult directly with a licensed insurance professional or firm.