Employment Practices Liability Insurance

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61% of employees report they have experienced Discrimination in the workplace. These types of experiences led to 61,331 charges filed with the EEOC in 2021. How do you protect your Restaurant from these types of claims? Aside from training your employees and implementing strong HR practices, you can purchase Employment Practices Liability Insurance.

 

What is Employment Practices Liability?

Commonly referred to as EPLI, Employment Practices Liability Insurance is designed to protect your restaurant against claims brought by employees of a Wrongful Employment Practice. A Wrongful Employment Practice may include:

·        Discrimination

·        Sexual Harassment

·        Wrongful Termination

·        Defamation

·        Slander

·        Misrepresentation

·        Retaliation

 

These policies don’t just pay damages, a good EPLI policy also provides Defense Costs coverage to help defend against these types of accusations.

 

Is it Expensive?

EPLI is rated based on the number of Employees you have and the industry and state where you operate. We recently quoted a company with 300 employees as the cost was $12,000 per year. Small businesses can find coverage starting at $500 per year.


What Should I Look For In An EPLI Policy?

LIMITS RETENTION DEFENSE COSTS THIRD PARTY LIABILITY OTHER COVERAGE SERVICES

How much coverage should you purchase? A basic limit of coverage can usually be included on your Business Owners policy with your General Liability and Property Coverage. If you’re going to get coverage on this policy, we recommend a minimum of $50,000. 

You should also explore the cost of stand alone EPLI policy with a $1,000,000 limit. Stand Alone (or monoline) EPLI policies usually provide broader coverage and give you access to Risk Management Services too. 

 

A $50,000 limit may provide a basic level of coverage to pay for a minor incident or pay for an attorney to handle a nuisance claim. It will usually be inadequate if a serious issue arises or when claims come from multiple employees.

Similar to a deductible, the retention is the amount you owe in a claim. Insurers have been increasing retentions in recent years so it’s important to consider that when comparing coverage offers.

Defense Inside or Outside: The limit of coverage you purchase may include the defense costs in the limit (inside) or the defense costs may have a separate limit (Outside). These types of cases can be very expensive to defend so purchasing a policy with Defense Costs Outside the limit will provide for more coverage for your company. Here’s an Example:

       Policy 1 (Defense Cost Inside the Limit): $1,000,000 Limit

             Defense Costs: $350,000

            Damages Awarded: $800,000

            Insurance Company pays $1,000,000

            Business pays: $150,000(plus any Retention due)

 

      Policy 2 (Defense Costs Outside The Limit) $1,000,000 Limit

            Defense Costs: $350,000

            Damages Awarded: $800,000

            Insurance company pays $350,000 in Defense Costs and $800,000 in Damages

            Business pays: $0 ( plus any Retention due)

Claims of discrimination can come from people other than employees. Food and Alcohol suppliers, janitorial and other services, and even customers may make a complaint against your business. Adding Third Party Liability to your policy extends your coverage to respond to these claims as well.

Wage and Hour Defense

Immigration Complaints

Workplace Violence

Crisis Management

Many EPLI policies will provide you with services to help reduce the chances of having a claim.  These include: 

Human Resources Documents

Access to Human Resources Training

Employee training on Harassment adn Discrimination

Attorney Hotline (discuss problematic situations at no cost)

If you’re ready to review your Employment Practices Liability Coverage, reach out today. At Statement Insurance Agency, we understand the nuances of these policies and we work with many insurers that offer this coverage to the restaurant industry. We’ll get all of the quotes for you and then help you determine which one best suits your needs.  Contact Us Today to get the conversation started.  

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