Insurance

One of the things that make certain aspects of the rising of technology and communication great for society is the ability that people have to advocate for themselves. In the business world, this is something that is fairly known, at least on the scale that is currently being experienced. Platforms like social media allow people to post opinions and raise awareness of pressing issues that deal with discrimination in an unprecedented way. The last couple of years has highlighted how powerful social media can be when it comes to unifying even global communities over issues of human rights and advocacy. 

While it’s a positive thing that more and more individuals are finding avenues to protect their rights, within the business world this is never essentially a simple black and white situation. Take a business that employs 80 people. No matter what kind of workplace environment that business has or how hard the executives fight for equality and fairness across the company, there’s always a chance that a bad egg could make it onto the team. 

If let’s say, this bad egg does make it past the initial screenings, through the interview process, and is on the team, there could be some pretty dire consequences. If this employee in question acts inappropriately, violates someone else rights, or sexually harasses another fellow employee, this could spell disaster for this small company. In a situation like this, the wronged party should have every right to seek reparations for the damages they suffered, but what happens if they sue the company in a way that it cannot financially afford? Should an entire company suffer or go down because of one person’s actions that do not reflect the values of that company? 

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If you think the correct answer to the above question is no, then you understand why EPLI insurance exists. This insurance is designed to help protect companies that may go through painful growing experiences by protecting them from the financial burdens of lawsuits dealing with employment practices. 

If you have been curious about EPLI and what it covers, here is everything you need to know. 

What Exactly is EPLI?

EPLI stands for Employment Practices Liability Insurance and is a form of insurance that helps protect companies that may have to unfortunate task of dealing with a lawsuit from an employee. It’s important to recognize that EPLI is not a way for businesses to ignore areas of need that their employees could bring up against them, as it’s not a magic get out of jail-free card. 

The simple truth is that the world is complicated and there can be several reasons why an employee would sue their employer. Perhaps it was direct negligence that lead to a legitimate offense that needs to be dealt with, or perhaps it was something that was accidental yet still unfortunate. When an employee feels that they have been wronged, they have every right to take legal action as they see fit and this kind of insurance helps to ensure that the company will not go financially bankrupt. 

What Are Employee-Related Allegations? 

When an employee feels that they have been wronged and brings legal allegation against their employer, this can spell trouble for a company. If the company is found guilty of these allegations, it could be sued and face significant financial challenges. This insurance is not meant in any way to help protect parties that offend but instead is meant to help sustain the company. 

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If an allegation is found to be true and is dealt with, this doesn’t mean that the employees who had nothing to do with it should suffer because their company underwent heavy financial challenges due to the allegation. Some of the most common allegations deal with sex, age, religion, and national origin. 

Whether an offense happens directly or indirectly, an employee can feel wronged in one of these areas and seek to press charges. When that happens, this kind of insurance protects the company from being put in a financially unstable position.

What is Covered?

Here are some of the most common things that a good EPLI policy will cover:

  •  Retaliation
  • Failure to Promote
  • Harassment
  • Defamation
  • Mismanagement of Employee Benefits
  • Negligent Supervision of Employees
  • Negligent Evaluation
  • Invasion of Privacy
  • Discrimination 
  • Wrongful Demotion or Disciplining of an Employee
  • Infliction of Mental or Emotional Distress 
  • Wrongful Termination of an Employee
  • Illegal Background Check
  • Pregnancy and Lactation Accommodation

Conclusion

The whole purpose of EPLI insurance is to help companies grow through situations where an employee may feel they have been violated. In most instances a company would love to correct any wrongs on their part and better their workplace environment, however, that can be impossible if the penalty is too great. With EPLI insurance, companies can rest easy that they are able to handle most lawsuits that may come their way regarding employee allegations.

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