Many insurance companies now offer what is known as employment practices liability insurance (EPLI). Whether an employer elects to purchase such insurance coverage is a decision which should be made with care and only after a complete review of various options open to the employer.
Your insurance agent or human resource consultant may urge your business to purchase employment practice liability insurance (EPLI) in the hope or belief that this insurance will protect your business against the risk of heavy financial losses resulting from employment claims. However, like most areas in the field of employment law, there are rarely simple answers to these critical problems; there are no magic bullets.
The typical EPLI policy will usually cover …show more content…
The types of claims that are not covered are described in a section of the insurance policy called "Exclusions." Typically, the language in the policy dealing with exclusions is very complex, and thus must be read carefully. At some point in the process of evaluating whether to purchase EPLI insurance, or any particular EPLI policy, the employer should seek the advice of an attorney to review the policy language. Otherwise, the employer might believe that the business was protecting itself from potential liability for employee claims, when in reality the policy covers very little.
Another critical issue in evaluating an EPLI policy is policy limits and the deductibles. The EPLI policy will usually contain a per-claim limit as well as an aggregate limit for all claims made under the policy. The employer must review these policy limits carefully to ensure that the needs of the business are being satisfied.
Related to the issue of policy limits is the question of the deductable. As in any other form of insurance, the higher the deductable, the lower the premium payment. If the business chooses a high deductable, then it is assumed that the employer is prepared to defend minor employee claims itself, while other claims with a high dollar risk potential will be covered by the EPLI …show more content…
An insurance company deals with the question of settlement of an employee claim with the same approach that is utilizes to consider settlement of any other claim, such as a property damage claim or other casualty claim. To an insurance carrier, every claim has a settlement value. This approach ignores the employee-relations impact that settlement of a particular claim may have on the workforce as a whole. If the employer gets a reputation for settling any lawsuit filed by a terminated employee, the employer will face the reality that any terminated employee will expect some type of monetary settlement, no matter what reason has prompted his or her
Your insurance agent or human resource consultant may urge your business to purchase employment practice liability insurance (EPLI) in the hope or belief that this insurance will protect your business against the risk of heavy financial losses resulting from employment claims. However, like most areas in the field of employment law, there are rarely simple answers to these critical problems; there are no magic bullets.
The typical EPLI policy will usually cover …show more content…
The types of claims that are not covered are described in a section of the insurance policy called "Exclusions." Typically, the language in the policy dealing with exclusions is very complex, and thus must be read carefully. At some point in the process of evaluating whether to purchase EPLI insurance, or any particular EPLI policy, the employer should seek the advice of an attorney to review the policy language. Otherwise, the employer might believe that the business was protecting itself from potential liability for employee claims, when in reality the policy covers very little.
Another critical issue in evaluating an EPLI policy is policy limits and the deductibles. The EPLI policy will usually contain a per-claim limit as well as an aggregate limit for all claims made under the policy. The employer must review these policy limits carefully to ensure that the needs of the business are being satisfied.
Related to the issue of policy limits is the question of the deductable. As in any other form of insurance, the higher the deductable, the lower the premium payment. If the business chooses a high deductable, then it is assumed that the employer is prepared to defend minor employee claims itself, while other claims with a high dollar risk potential will be covered by the EPLI …show more content…
An insurance company deals with the question of settlement of an employee claim with the same approach that is utilizes to consider settlement of any other claim, such as a property damage claim or other casualty claim. To an insurance carrier, every claim has a settlement value. This approach ignores the employee-relations impact that settlement of a particular claim may have on the workforce as a whole. If the employer gets a reputation for settling any lawsuit filed by a terminated employee, the employer will face the reality that any terminated employee will expect some type of monetary settlement, no matter what reason has prompted his or her