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EMPLOYMENT PRACTICES LIABILITY

You don’t think it will happen to your business until it does, make sure your covered when “Shit happens”

What is Employment Practices Liability Insurance and why do I need it?

Employment Practices Liability Insurance is a specialised type of insurance designed to protect businesses from legal claims related to employment practices.

This Insurance covers claims alleging discrimination, harassment, wrongful termination, and other employment-related issues brought on by employees, former employees, or job applicants.
Employment Practices Liability Insurance (EPLI) coverage is essential for businesses of all sizes, as workplace disputes can arise regardless of the company’s industry or reputation. Employment Practices Liability Insurance provides financial protection by covering legal defence costs, settlements, and judgments associated with such claims.

While not legally mandated in many places, including New Zealand, having EPLI is highly recommended for businesses to safeguard against the potentially significant financial effects of employment-related lawsuits.

Determining the appropriate amount of EPLI coverage depends on a range of factors, such as the size of your team, industry standards, past employment practices claims, and the financial resources of your business.

Considerations for Assessing Your EPLI Needs:

  1. Evaluate your workforce: Assess the size and composition of your workforce, including full-time employees, part-time employees, and contractors, to understand your potential exposure to employment practices claims.
  2. Review past claims history: Examine any previous employment-related claims or lawsuits against your business to identify patterns and assess your risk profile.
  3. Consider industry-specific risks: Recognize industry-specific challenges and trends related to employment practices, as certain sectors may face heightened risks of discrimination or harassment claims.
  4. Assess your risk management practices: Evaluate your current HR policies, employee training programs, and procedures for handling complaints to identify areas for improvement and mitigate potential risks.

Example of an Employment Practices Liability Insurance claim:

Insure-tradies-employee

An employee files an Employment Practices Liability (EPL) claim against his employer, a construction company.

The Employee alleges that he faced discriminatory treatment based on his age when he was passed over for a promotion in favour of a younger colleague with less experience.

Additionally, he claims that he was subjected to a hostile work environment due to harassment from a supervisor, which went unaddressed by management despite his complaints.

This EPL claim highlights the importance of fair treatment and proactive measures by employers to prevent discrimination and harassment in the workplace.

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