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EPL Insurance: How It Works, Why You Need It

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In the last 10 years a new kind of corporate liability insurance has found its way into the lexicon of American business.  Employment Practices Liability Insurance, or EPLI insurance, has become an increasingly popular supplement to Workers Compensation among employers. Like Workers Comp, EPL insurance protects business against possible lawsuits and/or judgments and the massive loss of money that may result. Unlike Workers Comp, however, EPLI doesn’t cover injuries or illness — instead, it protects businesses against liability for claims brought by employees who allege employment-related wrongful acts.

Understanding EPLI.

EPL insurance covers many kinds of employees, from full-time staff to temporary, seasonal and part-time workers from claims brought under the Equal Employment Opportunity Commission, or EEOC. Depending on your policy, it can also cover liability over sexual harassment, lack of ADA compliance, discrimination and violations of the Fair Labor Standards Act. Your total protections typically range from $1 million up to $5 million, with premiums starting at around $1,000 per year.

EPL insurance offers a potentially business-saving advantage to your company — it covers not only any judgment you might have to pay but also your legal defense costs. More and more small business owners are realizing that while a global enterprise might weather the costs of a big lawsuit, a decent-sized chunk of attorney time could sink a new, smaller-scale or struggling business completely. And if, like so many small business owners, your own fortunes are tied directly to the fortunes of your company, you might end up sinking too.

Even if you take great care to establish, practice and document your equal employment opportunity and fair treatment policies, you don’t want the occasional rogue lawsuit draining legal fees from your company’s coffers. Contact Acadia if you have additional questions about how various kinds of liability insurance can help protect your business.

Dan Hettrich is the director of sales at Acadia HR located in Austin, Texas. He can be reached at dan@acadiahr.com or 512-745-2985.

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Written by Dan Hettrich

March 29, 2011 at 12:50 pm

Posted in Uncategorized

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