EPLI
Don’t Neglect
Employee Practices
Liability Coverage
BY: DEBBIE HAGIHARA,
ATLAS INSURANCE AGENCY
T
he “Me Too” movement of
2017 was a game changer for
how men and women interact
in the workplace. While
the movement began in the
entertainment industry, it didn’t take
long for its ideals of fairness and equality
to permeate the political world as well as
virtually every other American workplace.
The lessons learned about an employee’s
right to a safe, harassment-free workplace
are here to stay, and employers need to
be hypervigilant about situations that
could cause them legal problems down the
road. Circumstances could include blatant
discrimination because of an employee’s
gender, sexual orientation, ethnic
background, religious preferences, and
other factors as well as more subtle types
of discrimination, such as pay inequality or
denial of promotion.
The CEO of a company is not only
responsible for their own behavior but
also for any acts of discrimination or
harassment by their employees. There
are several steps one can take to train
employees about mandatory workplace
rules, but Employee Practices Liability
Insurance (EPLI) is an essential foundation
of any protection plan. Not only does
EPLI provide direct financial protection
against losses, but with a speedy resolution
through insurance, it can minimize low
employee morale and reduced productivity
associated with an employment practices
claim.
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EPLI covers your risk due to employment-
related lawsuits, such as discrimination,
sexual harassment, wrongful termination,
workplace harassment, worker retaliation,
and other similar infractions. Policies can
differ widely in their rates and coverage, so
be sure to look for one that includes these
helpful features:
• A broad definition of the insured
that provides coverage for all related
parties, including directors, officers,
and employees.
• Prior acts coverage, to include
incidents that may have occurred
prior to the policy initiation date.
• No exclusion for intentional acts
such as employment termination,
demotion, or alleged failure to
promote.
• Third-party liability protection
that covers vendors, independent
contractors, and temporary employees,
among others.
• Wage-and-hour defense cost, which
covers claims from employees
claiming unfair compensation.
• Social media coverage, for claims
arising out of a lack of rigorous vetting
surrounding these communications.
In addition to getting the proper insurance
protection in place, you can work with
your HR department to develop rules
and processes for governing workplace
behavior. Perhaps most important is to
circulate a code of ethics by including
it in your employee manual—which
every business should have—and have
employees sign off on its contents. The
code of ethics should state a zero-tolerance
policy for discrimination and harassment,
with a thorough internal investigation
conducted for all possible infractions.
Another component of your company’s
policy should include a comprehensive
background investigation of potential hires
to uncover any past incidents that could
affect their employment eligibility.
While it may cost you in the short run, you
will sleep better knowing you are taking
a necessary step to protect your business.
Your Atlas insurance agent can help guide
you through the process of selecting the
best EPLI policy to meet your company’s
specific needs. +
Debbie Hagihara joined Atlas Insurance
Agency in 2005 and is an Account
Executive. She has over 25 years of industry
experience and is responsible for the
consulting, placement of insurance and
day-to-day servicing of risk management
clientele. Prior to joining Atlas, Debbie
worked for a global insurance agency for
14 years as a Senior Account Manager
with managerial responsibilities.