What Is Employment Practices Liability Insurance?

Employment practices liability (EPL) insurance protects businesses against certain costs and liabilities linked to various types of lawsuits. This is sometimes included under commercial general liability insurance, though it may be a more distinct, separate policy. EPL is often purchased in addition to other forms of coverage, such as business casualty insurance.

How Does EPL Insurance Work?

Employment practices liability insurance works by providing businesses with some coverage for claims that arise out of the company’s actions. The business pays monthly premiums, and if a lawsuit is filed against the business, the insurance company will cover costs such as:

• Legal damages
• Settlement amounts
• Cost of defense
• Other amounts

The exact amount and scope of the coverage will of course depend on the policy contract between the insurer and the insured.

What Does EPL Typically Cover?

EPL usually covers:

• Employment-related injuries and torts
• Sexual harassment claims
• Wrongful termination cases
• Wage/hour lawsuits
• Misrepresentation or fraud claims

Some contracts may contain “catch-all” phrases that are intended to cover a variety of situations. For instance, the contract may address “loss resulting from an employment-related claim.” Disputes over policy contract terms can often arise in connection with an insurance claim. Thus, it is important that both insurer and the insured be in full agreement on the policy terms.

Do I Need an Employment Lawyer?

EPL insurance can often be complex, as employment claims can be different for every business. You may need to hire an workers compensation lawyer if you need help negotiating, drafting, reviewing, or litigating an insurance policy contract. Your lawyer can represent you and provide you with much-needed legal advice and guidance for your claim.