Liability protection policies are a standard for companies today. However, recent trends show that standard liability protection doesn’t provide complete coverage. In the past 20 years, Employment Practices Liability (EPL) claims brought against employers or former employers has increased by 125 percent. These claims include liability resulting from actual or alleged wrongful termination, sexual harassment or discrimination against an employee.

The rapid growth in employment-related lawsuits is due in large part to changes in the workplace itself, things like corporate downsizing, federal legislation of employment practices, and the increased number of women and minorities in the workplace. Losses resulting from these types of claims are not covered by an organization's traditional General Liability, Directors & Officers (D&O) or Comprehensive Liability insurance.

In light of these facts, more and more companies are purchasing Employment Practices Liability Insurance (EPLI)—coverage that specifically protects them in employment-related lawsuits.

A Rising Need for EPLI Coverage
In the Employment Practices Liability Survey, over half of the HR professionals polled said they had been taken to court at least once over a lawsuit relating to employment. The survey, conducted by the Society for Human Resource Management and the law firm of Jackson Lewis, reported that of those employers taken to court, 37 percent were sued by current employees, 8 percent were sued by unsuccessful job candidates, and 5 percent were sued by prospective employees.

The survey also shows that this rise in litigation has produced an increase in the purchase of Employment Practices Liability insurance. About 29 percent of the respondents said they did have EPLI coverage—up 22 percent from last year. And one in 10 said that their companies were currently considering such coverage.

What does EPLI cover?
Employment Practices Liability Insurance covers losses not covered by traditional liability insurance. Some examples of issues covered by EPLI are:

• Wrongful termination
• Discrimination
• Sexual harassment
• Whistle blowing
• Libel
• Slander
• Invasion of privacy
• Assault
• Breach of contract
• Negligent hiring
• Supervision

Source: Huckleberry, Sibley & Harvey Insurance and Bonds, Inc.