What Small Businesses Need to Know About EPLI

Why your small business needs the protection offered by EPLI.

While most small business owners know how important it is to secure the right commercial coverages, many only think about general liability, commercial property, and workers compensation insurance.  However, there is actually a wide variety of business insurance in Detroit, Michigan that can protect against your company’s specific risks. One type of coverage that almost every business can benefit from is EPLI.  But what is EPLI, and how can it protect your company?  Here’s what you need to know.

  • What is EPLI?

EPLI, or employment practices liability insurance, is a form of commercial coverage that protects businesses against legal claims filed by potential, current, or former employees.  Common EPLI claims include discrimination, wrongful termination, sexual harassment, breach of contract or employment agreement, and so on.  Even if the employee claim is invalid, the cost of defending your business in court comes at a high cost.  EPLI ensures that you have the resources that you need to cover the costs related to an employee-filed lawsuit.

  • Do I really need this coverage?

While all businesses benefit from having EPLI coverage, small businesses need this protection the most.  This is because smaller business entities typically face a greater risk for employment-related lawsuits.  Small businesses have greater EPLI risks for several reasons.  First, they typically have a smaller staff and do not have a designated HR department.  This means that they cannot get immediate assistance with tricky employment situations. Additionally, smaller businesses are less likely than larger corporations to have detailed records of employee performance and strict guidelines that govern the hiring and firing processes.  Finally, because small businesses usually have fewer employees who develop strong relationships, it’s more common for employees to have intense emotional reactions if they are laid off or fired.  Because a disgruntled employee can file baseless claims with the intent of hurting your business, it’s best to protect your company with the right EPLI coverage.

  • How can I prevent EPLI claims?

In addition to treating all employees fairly and with respect, you also need official documentation of your fair business practices.  For instance, you should keep organized, detailed employment documents that prove that you treat all your employees equally.  Having physical proof of your good business practices is the best way to verify your company’s innocence against an employee’s claims. Great things to keep records of include workplace policies on fair hiring and firing, workplace sensitivity training, employee performance reviews, and so on.

This is what the right EPLI coverage can do for your business.  Do you need help securing EPLI, or do you want to learn more about business insurance in Detroit, Michigan?  If so, then contact the commercial insurance experts at CIA Insurance and Risk Management for assistance today.

Post written by Michael Rutkowski, Commercial Risk Advisor | Commercial Risk Management (CRM)

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