When you own a construction business, you face a lot of risks both on and off the project site. Your contractor insurance policies can go a long way in helping you defend yourself against financial loss, but one policy in particular can protect you from lawsuits and claims that come from within your own organization: Employment Practices Liability Insurance (EPLI).
How Employment Practices Liability Insurance Works
Employment Practices Liability Insurance covers employment related claims from current, former, or even prospective employees. Coverage can also be broadened to extend coverage to independent contractors and provide third party coverage in the event your employees harass a third party and you are found liable. In general, EPLI claims may result from the following wrongful acts: wrongful termination, discrimination, emotional distress, or harassment. There are many other defined wrongful employment acts in EPLI coverage forms, but these are some of the more common exposures related to EPLI.
The EPLI policy can also sometimes be purchased including coverage for immigration defense which covers contractors for defense if they are investigated for using undocumented workers. In addition, optional wage hour defense is available in some cases if an employee makes a claim involving overtime, exempt, or non-exempt status. Wage hour defense is a popular coverage extension and difficult to obtain in the California market. However, we have carriers that are currently offering sub limits of coverage for wage hour defense and it is available for contractors subject to underwriting approval.
EPLI policies keep changing as they adapt to market conditions. New coverages that are being introduced as part of EPLI policies include cyber bullying coverage, coverage for social media, and privacy coverage which provides coverage in the event sensitive employee information is obtained by an unauthorized source.
What Employment Practices Liability Covers
If you face a lawsuit alleging a wrongful employment act, you will have security knowing that your employment liability coverage may cover you for:
- Lawyers’ fees
- Court costs
Even if the claim against you is meritless, legal fees could still add up fast. Whether you are at fault or not, your employment practices liability coverage can protect you from areas of employment risk.
Do You Need Employment Practices Liability Coverage?
General liability insurance and workers' compensation both exclude EPLI related claims. If you hire employees or use independent contractors for your construction business, then you have exposure to an EPLI related claim.
Beach & O’Neill Insurance Associates works with the most popular EPLI providers in the insurance industry. With constantly changing policy forms and new coverages being developed, we are qualfied to discuss EPLI coverage and whether it is right for your business. Please contact us if you have any questions regarding adding this coverage to your insurance portfolio.