Employment Practices Liability Insurance (EPLI) offers protection against lawsuits arising from current, prospective, or former employees who make claims of wrongful acts, including wrongful termination, sexual harassment, or discrimination. A wrongful employment practice claim, even when false can damage your reputation and lead to financial damages. If you have employees, it is strongly encouraged that you should carry EPLI.
So, what happens if a customer or vendor files a lawsuit claiming discrimination – is your business protected?
Many commercial general liability policies specifically exclude coverage for harassment and discrimination and Employment Practices Liability Insurance does not cover all claims of discrimination and harassment, it only protects against claims made by current, former, or prospective employees.
Third Party EPLI fills the gap between general liability and an EPLI policy by offering protection against allegations of wrongful acts made by customers, clients, vendors, and suppliers. It is difficult to determine when what seems to be small issue or discrepancy will turn in a large claim, with huge legal fees, so having coverage in place is an important part of every business’ risk management program.
Third Party EPLI includes coverage for allegations of discrimination based on
- Sexual orientation
- And National Origin
It also covers harassment in the form of:
- Unwanted sexual advances or unwanted requests for sexual favors
- Verbal or physical actions that cause a hostile or offensive work environment
In the past, Third Party EPLI would have been considered a hidden exposure, however it has moved to the forefront with increased volume of workplace claims filed with the Equal Employment Opportunity Commission.
As our society continues to be increasingly litigious, having the correct coverages in place to protect against claims of discrimination and harassment is vital to all businesses, whether the claim comes from a current or former employee, a client, vendor, or supplier.
For more information on how EPLI and Third Party EPLI protect your business contact one of our knowledgeable insurance professionals.