Business.com - Basics of Employment Practices Liability

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Find out how to protect your business from liability claims filed by employees.

BIO:

Loraine Lacey is an insurance producer with Freeman & Pearce Insurance Agency and the President of the Independent Agents and Brokers of Orange County.

TRANSCRIPT:

Hi, I'm Loraine Lacey. I work with Freeman & Pearce Insurance Agency, and I'm also currently President of the Independent Agents and Brokers in this territory. Today, we're going to talk about Employment Practices Liability Insurance, also known as EPLI.

Workplace discrimination claims are at an all-time high, and you might ask why that is. It's because of the economy. People are desperate to get money. Therefore, they think that by suing, they're going to get money. Employment Practices has to do with the employee suing you, the employer. All businesses are very vulnerable at a time like this, and you might think that you just have one employee and they're not going to sue you. One employee will (at) sue -- one employee, two employees, three employees... So, no matter how small or how big you are, you desperately need Employment Practices Liability.

Just to give you an idea of the seriousness of this situation; even if you were innocent in a claim, the average defense cost is $49,000 and many, many, many days of work to assemble every piece of paper you can find to show that you're innocent in the case. However, if you are found to be at-fault, the standard price right now is around $250,000, and that's if you settle on the court room steps.
There is a portion of the EPLI policy that is extremely important, and it is called Third Party Employee Practices Liability. Did you know that if, for example, you own a body shop, and the gentlemen uniforms to work; if they wear those home in the evening and on the way, stop at a bar, you could be liable to what they do and say to someone else in the bar. That's called, Third Party EPLI Coverage -- very important coverage. We suggest now, to our people, "Do not send your employees home in a uniform with your name on it. Have them change when they get to work; it eliminates part of the problem."

It is estimated that one in four businesses is going to be sued in 2010 with an Employee Practices Liability claim. Call your insurance agent today. Find out what you can do to add this coverage to your policy.

I'm Loraine Lacey. Thank you for watching this video.

Employment Practices Liability Insurance pointers:
• EPLI protects your business when employees sue
• Defense costs can cost tens of thousands of dollars
• Employers can be held liable for employees' actions after work

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