Employment Practices Insurance Explained
Employment law is complex and constantly evolving and from the moment that you start the pre-hiring process until the exit interview, you are vulnerable for an employment practices lawsuit. As a result, your business should take a hard look at whether it can afford to defend itself against alleged wrongful employment practices accusations. If not, Employment Practices Insurance can protect against wrongful termination, discrimination (age, sex, race, disability, etc.) or sexual harassment suits from your current, prospective or former employees. Employment Practices Insurance can cover all employees of an organization including directors & officers, and can sometimes extend to third party liabilities. Although Employment Practices Insurance is available as a stand-alone coverage, it is also frequently sold as part of a management liability package policy or to private companies as part of a directors and officers (D&O) insurance policy.
Why Choose Employment Practices Insurance?
According to researchers, three out of five employers will be sued by a prospective, current or former employee while they are in business. While some suits are groundless, defending against them is costly and time-consuming.
What Does Employment Practices Insurance Cover?
Employment Practices Insurance provides protection from wrongful employment practices, including but not limited to:
- Harassment
- Discrimination
- Actual or alleged wrongful dismissal, discharge or termination
- Employment-related misrepresentation
- Employment-related libel, slander, humiliation, defamation or invasion of privacy
- Wrongful failure to employ or promote
- Wrongful deprivation of a career opportunity, wrongful demotion or negligent evaluation
- Wrongful discipline
- Vicarious liability for intentional acts
- Punitive damages where insurable by law
Many Employment Practices Insurance policies also offer the following inclusions and add-ons:
- Consultation, HR assistance and other risk management consultative services.
- Coverage for defence costs outside the policy limits (for qualifying risks).
- Third party liability coverage (for qualifying risks).
- Volunteer workers can be added as additional insureds.
- Extended reporting periods may be added.
To learn more about Employment Practices Insurance and how it and other insurance solutions we offer can help protect your business connect with an ALIGNED Insurance Advocate today or visit us at www.alignedinsurance.com
