All Medical Practices Need EPLI Policies
Craig Skerpac, MBA
You want to attract the absolute best talent to your medical practice. You also want to make sure that you create an environment in which they can prosper. They should be able to (indeed, have a right to) work within an appropriate, mutually-supportive atmosphere. That is why so many workplace laws govern how employers must handle conduct throughout the hiring, retention and dismissal processes. Should someone allege that you did not handle their employment correctly, then they might sue. The legal costs alone, not to mention the reputational damage, could put the practice in a very insecure place. What can you do about it?
To protect yourself in these situations, your practice will need employment practices liability insurance (EPLI insurance). More commonly, this coverage is called EPLI insurance.
What is EPLI Insurance?
EPLI insurance exists for the specific reason that you might face severe consequences following allegations that you failed in your duties to provide fair employment. That means you did not provide every employee with a good working environment.
Coverage applies to costs that might arise if someone alleges that the business or someone within acted inappropriately during hiring, retention or termination processes. Usually, it can apply to costs related to allegations of:
- Discrimination (race, disability, age, sex and more) in hiring or firing
- Sexual harassment
- Wrongful termination
- Breach of employment contract
- Failure to promote, deprivation of opportunities
- Mismanagement of benefits
- Infliction of emotional distress
Employees have rights within the workplace. On the basic level, your practice’s employees in good standing should be able to walk into the business feeling safe and secure. They also have a right to fair treatment in their positions.
An employee’s right to fair treatment can result in a variety of regulations. Employers cannot discriminate and they cannot cause employees significant discomfort within the workplace. They usually also have to also evaluate everyone fairly in both promotional and disciplinary actions. Failing to do so could cause a variety of ethical dilemmas and also potentially violate employment laws.
Regardless of whether a violation occurs, that does not mean that someone could accuse the business of causing a problem. It is in these situations that an EPLI policy can provide for the costs of fighting such claims.
When Does it Apply?
There are multiple parties who might claim that your practice committed an employment practices breach.
- Prospective hires might come for an interview. However, you might decide not to hire them. As a result, they might allege that you discriminated against them. For example, a female applicant might allege that you chose to hire a male who was less qualified for the position simply because he was a man.
- An employee might allege that one of their superiors or coworkers sexually harassed them. They might claim that you failed to address the claim appropriately. Some might even claim that you retaliated against them for bringing the matter up.
- You might fire an employee because they have repeatedly broken the practice’s rules. However, they might allege that you targeted them unfairly or discriminated against them by firing them.
Should you have to settle with these parties, or if the suit leads to a judgement, EPLI coverage might cover the costs.
Remember, however, that the parties that sue you usually have to prove that you actually did what they claim. The court might find that you did nothing wrong and broke no laws. However, even if a lawsuit comes to nothing, the legal costs might mount. EPLI policies might apply to these legal costs to ease the practice’s burden.
Take note, however, that EPLI policies won’t cover every potential act of misconduct or cost that might arise from lawsuits.
- Policies usually will not pay for costs related to violations of certain employment laws, like the National Labor Relations Act.
- Wage & hour claims won’t have coverage.
- Coverage usually won’t pay for punitive damages awarded by courts.
- Criminal acts, such as sexual assault claims, won’t have coverage.
- Certain privacy violations will not have coverage.
- Policies will not apply to workers’ compensation claims.
In these cases, other insurance policies might be able to help you.
Parties in your business might sue you long after an accident occurs. However, many EPLI policies only exist on a claims-made basis. That means, for the policy to apply, it must be active when an accident happens and when the lawsuit or claim occurs. To get coverage for claims arising after a policy expires, consider getting a tail policy. It can extend protection to times when a policy is no longer active, but someone might want to file a claim against it.
Our agents know how to help you get the right EPLI insurance. Don’t wait, let us help you get a policy today.
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