Hiring workers lets businesses accomplish more, and many businesses in Massachusetts would be unable to operate without workers. Hiring people, however, exposes businesses to a range of possible liability risks. Employment practices liability insurance policies help protect against many of these risks.
Employment practices liability policies are specialized commercial liability policies for businesses that hire workers. As a form of liability protection, policies typically help with legal defense fees, settlements and judgements associated with covered claims.
EPLI policies tend to cover a range of employment-related risks. Some examples of incidents that a policy might cover include:
An interviewer asks an illegal question while interviewing someone
A manager fails to notify applicants that background checks will be run on them
A female employee discovers that she’s being paid less than male colleagues
An intern should have been paid for their work but wasn’t
An older employee is fired because of they’re age
As with most kinds of insurance, the exact incidents that a particular policy covers depend on that policy’s terms and conditions. There are only examples of what might be covered, and this is far from a comprehensive list.
Most businesses in Massachusetts that have or will soon hire employees should consider getting an EPLI policy. Employers who have just a few employees and those that have thousands can both be sued for discriminatory and other illegal employment practices, and a business doesn’t have to be found guilty before it faces substantial legal fees.
Because policies sometimes cover incidents that occur during the hiring process, businesses should consider purchasing a policy before they post any open job positions. Any business that’s unsure when the right time to get a policy is can talk with an agent who specializes in this type of coverage about the business’ specific situation. A knowledgeable agent will have sound advice on what to look for in a policy and when to purchase one.
Both employment practices liability insurance and workers compensation insurance offer protection in situations where employees are negatively impacted. The types of situations that each insurance covers are different, though:
Employment practices liability usually covers employment-related lawsuits
Workers compensation usually covers job-related illnesses and injuries
In most cases, businesses that have employees should carry both types of insurance (and may be legally required to carry workers compensation).
General liability insurance typically covers situations involving third parties. For example, a policy might cover third-party injuries sustained on company property, damage caused to a third party’s property, and libel, slander and false advertising lawsuits filed by third parties.
Employees normally aren’t considered third parties and therefore, lawsuits filed by employees usually don’t fall under the domain of general liability. Instead, they might be covered by employment practices liability, workers compensation or another coverage depending on the nature of the incident.
The price of employment practices liability insurance often varies and is based on several factors. A few items that insurance companies might consider when setting rates are:
How many employees an employer has
How much employees are paid
What industry a business operates in
Whether a business has filed claims in the past
Businesses can find out how much a policy would cost them by contacting an independent insurance agent, for independent agents are able to compare policies and rates from different insurance companies.
For help finding employment practices liability insurance, contact Garrity Insurance. Our independent agents have helped many businesses in Massachusetts get a policy that meets their needs, and we’d be happy to assist your business.