Employees are the literal lifeblood of many businesses, and a lot of companies would cease operating if they had no workers. Bringing on employees, however, comes with certain risks. Employment practices liability insurance helps safeguard Massachusetts employers from some of those potential risks.
Employment practices liability insurance is a specialized form of commercial liability coverage that uniquely helps protect against employment-related risks that businesses face. Like most liability coverages, employment practices liability policies normally help pay the cost of legal fees and settlements that are associated with covered lawsuits. The financial help is usually provided irrespective of a lawsuit’s final outcome.
There are many Massachusetts businesses that can benefit from an EPLI policy. Generally speaking, the vast majority of businesses in the state that hire employees ought to consider purchasing this form of insurance. After all, any employee (or even an applicant) can allege wrongdoing and sue -- and few businesses could afford a major lawsuit without suffering significant financial difficulty.
Precisely what any one EPLI policy covers will be dictated by that policy’s particular terms and conditions. Depending on a policy's terms, it may extend protection to situations such as these:
A hiring manager decides not to hire a female candidate upon learning that she is currently pregnant
A manager fails to notify job applicants that the company will run background and/or credit checks on them
A female employee finds out she’s compensated less than equally qualified male employees the same position
An entry-level applicant is awarded an unpaid internship that should have been compensated as a traditional job
A senior employee is terminated due to their age and the effect it has on company culture
An employee is terminated due to their social media posts even though the company has no policy that addresses social media usage
An insurance agent who specializes in this type of coverage can provide more examples of what a policy might cover, and they can go through a specific policy’s terms to determine what it indeed does cover.
Businesses generally should follow all applicable labor laws, and this can greatly reduce a business’ chances of being sued by an employee. Simply following the law, however, is not a completely bulletproof way to protect against potential employment-related lawsuits.
Since lawsuits can be expensive to defend against even if the accused party is innocent of the allegations, businesses generally should be prepared to defend themselves against inaccurate allegations that claim labor laws were broken. An EPLI policy can be an important part of a business’ preparation for potential lawsuits.
EPLI policies and workers compensation policies both offer protection against risks that come with hiring employees. The types of incidents that these two insurances protect against are significantly different, though. EPLI policies typically shield businesses from employment-related lawsuits, while workers compensation generally protects against work-related injuries and illnesses.
Thus, businesses that have workers compensation insurance usually still need an EPLI policy because the two tend to provide different protections.
For help with finding an employment practices liability insurance policy in Massachusetts, contact the independent insurance agents at Roger Keith & Sons Insurance. Our agents can help you compare policies offered by different insurance companies, and we can assist you in selecting the most appropriate coverage option.