What Every Employer Needs to Know About Employment Practices Liability

When it comes to business insurance, the coverage options are practically endless. Many business owners are left wondering what coverage options are the right choice for their unique risks and needs. Employment practices liability insurance (EPLI) is one of the coverage options that is commonly misunderstood and underestimated by business owners. If you have been wondering whether EPLI is really necessary for your business, here are a few things you need to know about this important coverage option.

What Is EPLI?

Employment practices liability insurance provides financial protection in the event of claims made by potential employees, former employees or current employees in regard to wrongful acts committed during the employment process. When workers make claims that employers have violated their legal rights as employees, EPLI steps in and offers financial protection that is not typically provided by standard liability policies. Examples of claims covered by most employment practices liability policies include:

  • Wrongful termination
  • Hostile working environment
  • Sexual harassment
  • Mismanaged benefit plans
  • Discrimination (disability, sex, race, age, etc.)

Some policies may also cover claims of invasion of privacy, defamation, emotional distress, battery, anguish, loss of consortium and more. They do not generally provide coverage for violations of the following: Occupational Safety and Health Act (OSHA), Consolidated Omnibus Budget Reconciliation Act (COBRA), Fair Labor Standards Act, or the Employee Retirement Income Security Act (ERISA).

To find out more about EPLI coverages and exclusions, or to modify your current policy to include this important coverage, talk to your insurance agent.

Interview Techniques for Inclusive Hiring

Employment practices liability is a constant threat for employers and recruiters who must hire regularly. At a staffing agency, this is your entire business, so the risk can be even greater than it is for other companies. This means it’s important to take extra precaution, too. There are a number of techniques you can pick up to integrate into your interviewing technique and sidestep common liabilities.

Keep Questions Strictly Professional

If you see that your candidate graduated from a college in your hometown, it may be tempting to comment and ask about their background, too. Though these questions can be innocuous, they can also be interpreted as discriminatory. Keep questions related to professional experience only.

Don’t Ask for Unnecessary Details

Your position may require weekend availability, and you may inquire about this because it is relevant to the position. You should not, however, ask for additional details. Your candidate’s availability may be related to religious activities, but it isn’t a good idea to ask for clarification or seek out this information.

Focus on Essential Job Functions

It is legal and reasonable to ask a job candidate whether or not they are able to perform the essential duties of the job. Making a judgment outside of their own self-assessment is discriminatory, however, and poses a major employment practices liability.

Infographic for Staffing Insurance

We’ve broken down common risks that the staffing industry might face and provided a staffing insurance solution to reduce that risk in this staffing insurance infographic.
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