Twenty years ago, it would have been virtually unheard of for the average company to purchase employment practices liability insurance, also referred to as EPLI insurance. Within the last few years, however, it has become a necessity for most employers. There are many factors in the changing work environment that have increased the level of risk for employers.

Sexual Harassment

The #MeToo movement has brought to light many incidences of sexual harassment that women and men have faced in the workplace. Even if a company has done everything right and has faithfully followed best practices, including firing an employee for unacceptable behavior, it may still be liable to lawsuits by the victim. The perpetrator could also potentially sue for wrongful termination.

Other Areas of Coverage for EPLI Insurance

Discrimination and retaliation are other examples of the threats that employers can face. The current average cost of litigation that a company could be subjected to is about $160,000. Source: https:www.arroyoins.com

If your company has EPLI insurance and you are sued by a former or current employee, your insurer will step in and protect you by covering the cost of any judgments or settlements. EPLI insurance may seem like a costly and unnecessary expense for the average company. Going without it, however, could potentially put an organization at a much greater risk.