What is Employment Practices Liability Insurance?

There are many laws that govern how employers must treat applicants and employees, and failing to follow just one can have serious financial consequences. It can be challenging to keep up with all new regulations and make sure none are ever broken, though. Even the most well-intentioned employers in New Jersey might make a mistake. Employment practices liability insurance helps protect employers from covered lawsuits that employees file accusing employers of employment practice infringements.

Employment practices liability insurance (EPLI coverage) provides coverage against certain types of lawsuits that employees might file against a business, namely lawsuits over the business’ employment practices. Depending on a policy’s specific terms and conditions, it may cover a suit that alleges:

  • Pregnancy discrimination
  • Background checks were performed illegally
  • Unpaid internships were taken advantage of
  • Genetic discrimination

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What Businesses in New Jersey Should Consider EPLI Coverage?

Any business in New Jersey that has employees may want to consider getting an EPLI policy. This includes everything from a restaurant in Camden, NJ to a major corporation in Princeton, NJ. Lots of businesses have at least one employee, and all of them should have protection in case an employee seeks compensation for an infringement. Protect Your Business

When Should Businesses Get EPLI Coverage?

Businesses ought to consider getting an EPLI policy before they hire their first employee. Because policies typically cover hiring decisions and practices, as well as post-hiring employment policies and actions, it’s important to have a policy in place before any hiring actions are taken. For some businesses, this is before they even open for business. Other businesses may go years before they hire their first staff member.

Even if businesses are confident that their employment practices meet all legal requirements, they may still want an EPLI policy for two reasons. First, employment laws change periodically, and it’s possible to miss a change and make a mistake.

Second, simply defending a business in a lawsuit is often an expensive proposition. Although a business may win a suit, defending itself in court could cost tens of thousands of dollars. Most EPLI policies cover both legal expenses and settlements associated with any covered employment-related lawsuit, thus helping defray legal costs for covered suits.

How Can Businesses Get EPLI Coverage?

There are several ways a business might obtain EPLI coverage. Sometimes, it’s included within a workers compensation policy. A business may already have coverage through its workers comp policy, or it might be able to purchase coverage as an add-on. Businesses that can’t secure coverage through a workers comp policy might need to get a stand-alone EPLI policy.

Make Sure You Have the Right Coverage

An independent insurance agent who specializes in commercial policies and is licensed in New Jersey can help businesses review their workers comp policies for employment practices liability insurance. If a business’ policy doesn’t have coverage, an agent can help the business find it through another workers comp policy or a separate EPLI policy.

Meet Your Industry Specialist

Jeff Kroeger

Principal, Senior Vice President, and Head of Commercial Lines, Mr. Kroeger also manages the company's hospitality book of business and is that unit's primary producer. He is a graduate of Montclair State University and was named a 2015 Young Gun Insurance Business America.

Jeff has been providing exceptional insurance for restaurants, bars, nightclubs, and more for many years. He understands the unique challenges this industry faces and delivers the right coverage at an affordable price.

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