Employment Practice Liability Insurance (EPLI) - Maryland
Maryland Business and Commercial Insurance
Coverage for Baltimore, Washington D.C. and the greater Chesapeake Region
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By hiring employees, you have an obligation to ensure they work in a safe and secure environment. Should you fail in that duty, you may see the affected party take action against you.
To protect yourself from such events, there’s employment practices liability insurance (EPLI). EPLI helps you protect your business and employees against allegations of harm and harrasment arising in the workplace.
What does an EPLI policy cover?
An employee might have a complaint against your business. Even if you think you have done everything right, staff members could still charge that there were problems during their time with you. Those allegations might trigger the involvement of the authorities, investigators, regulators and others. Such situations would prove very costly to the business and might even threaten its existence.
If you have EPLI insurance, you can meet such challenges. Your policy will cover you and your operations if current employees, prospective hires or previous employees file claims of unfair treatment against you.
Policies will generally insure claims arising from allegations of:
- Discrimination by race, sex, disability, pregnancy or ethnicity
- Wrongful termination
- Wage discrimination
- Failure to promote
- Sexual harassment
- Invasion of privacy
- Negligent evaluation
So, if someone you recently let go alleges you did so in a discriminatory manner, then you may be able to file a claim on this policy. EPLI would help you fight the claim, pay legal costs, and settle damages.
Please remember: Most EPLI Policies won’t cover bodily injuries, intentional criminal acts or violation of certain employment laws. Therefore, you’ll likely need a few other types of liability coverage, like general liability and E&O insurance, to help fill in perspective gaps.
How much EPLI coverage do I need?
A lot of EPLI claims settle for around $25-$50,000. However, significant claims could cost a lot more. Many EPLI policies will provide at least $100,000 in coverage per claim.
The size of your business, the number of employees, industry-specific risks, and assets on hand might influence the amount of coverage you eventually choose. Talk to McFarlin today about the right starting limits and deductibles for your needs.
What is third-party EPLI coverage?
You aren’t the only person who works for your business. Therefore, there’s always a chance that third parties, like customers or vendors, allege that one of your employees harassed or discriminated against them. The employee themselves could face a liability claim. However, a standard EPLI policy often won’t cover public allegations against employees. In that case, you might need third-party EPLI coverage.
With third-party EPLI coverage, you’ll be able to insure not only the business, but also employees against their own actions. If you regularly work in customer service, then third-party coverage might be an important asset you need to add.
Does EPLI cover independent contractors?
Some employers wonder whether they bear any employment liabilities for independent contractors. To cover contractors under EPLI coverage, make sure your policy defines contractors among covered employees. Certain policies might not offer contractor coverage automatically. Therefore, talk to your agent about the employment status of all parties working under your orders.
Does EPLI cover wage-and-hour claims?
Wage-and-hour claims arise if employers fail to follow compensation and minimum wage laws. For example, if you don’t pay employees time-and-a-half overtime, then you might face such claims.
Unfortunately, many EPLI policies do not cover wage-and-hour claims because such claims often call employment law into question. Never fear, however. Some insurers have begun to offer wage-and-hour insurance because of the significant litigation costs often associated with these claims.
Do you employ domestic staff? You may need employment practice liability insurance.
The relationships between domestic staff and employers might increase certain risks of EPLI claims. These individuals are still your employees, and they have most of the same workplace rights as anyone else. Therefore, most domestic employers should consider carrying EPLI coverage. While some homeowners insurance policies offer EPLI extensions, a stand-alone policy often proves a better option.
We Can Help
For help obtaining employment practices liability coverage, come to the McFarlin Insurance Agency, LLP. We’re here to help you when you need assistance getting the right plan. Contact us at 410-312-7800 or request an online quote today.