As an employer, it is in your best interest to ensure that your financial interests are protected. Remember that, any time you hire an employee, you are increasing your company's risk of a claim or loss for many different reasons. That's why employment practices liability insurance is such an important investment. Here are a few things that you should know about employment practices liability insurance.
Why Does Employment Practices Liability Insurance Matter?
Before you can really understand how it can help you, it's important to have a basic understanding of why it matters. Any business that includes employees is at risk of facing a lawsuit for various actions and incidents, even some beyond your control.
Employment practices liability insurance offers you protection for these claims, saving your company from having to pay cash to settle them. This can help to protect your business from costly settlements and the potential for significant asset loss.
What Situations Will Employment Practices Liability Insurance Cover?
There are many different situations that can benefit from having the protection of an employment practices liability policy. Understanding when it can be beneficial can help you to understand why this type of policy is worth investing in.
Business Practices: Some business practices and mistakes can be covered by policies like these. Things such as wrongful termination, discrimination, and even violations of laws such as the FMLA act all fall under wrongful business practices that can be protected by an employment practices liability policy.
Employment Issues: In addition to errors in your overall business practices, you can also get coverage for other employment issues, including protections for breach of contract, negligence in performance evaluations, retaliation, and more. If there's a hostile work environment that leads to a lawsuit, your policy will help cover the settlement.
What Does Employment Practices Liability Insurance Not Cover?
As important as it is to understand what your policy will cover, it's equally important that you understand what the policy won't cover. This helps you to understand where you may need additional coverage.
For example, this type of policy won't offer any protection for criminal or deliberate actions. Additionally, it won't provide protections for worker's compensation claims or COBRA-related issues. Further, wage and labor problems aren't typically covered either.
You should talk with your commercial insurance agent today about the types of policy protections you need for your business and to secure the policies that are right for you.