Employee lawsuits have been on the rise over the past decade. The costs to defend against a lawsuit as well as any damages awarded can put any business at risk. In California (CA), employment practices liability insurance (EPLI) is available to businesses of all sizes and can help them cover costs in the event of a lawsuit. However, employers must understand what these policies do and do not cover and obtain appropriate EPLI coverage in California. An experienced employment law attorney can assist businesses as they evaluate policies and make decisions about EPLI insurance.
An Attorney Can Help Make the Most of Your EPLI Coverage in California
While a CA EPLI policy is a good first step to protect your business, it is not a foolproof solution. EPLI coverage in California varies greatly among policies, and not every lawsuit will be covered by your policy. When you are facing an employee lawsuit, a CA EPLI claim attorney can help you make the most of your policy and protect your business.
What Is Employment Practices Liability Insurance?
EPLI is a type of insurance policy intended to protect businesses from financial losses when they are confronted with employee lawsuits. EPLI can cover expenses related to defense costs as well as damages awarded in a lawsuit. The most common types of employee lawsuits covered by EPLI include harassment, discrimination or wrongful termination.
EPLI policies are available as stand-alone policies or in a bundle with other types of business insurance coverage. Some policies may also include coverage for third party claims. Third party EPLI claim examples include claims against a business by customers or clients.
Why Employers Need EPLI Coverage in California
The costs associated with defending employee lawsuits can be staggering even if no damages are awarded. When businesses are found not to be at fault, they are still left with significant legal defense fees that can impact the bottom line. When businesses are found to be at fault, settlements can range from a few thousand dollars to millions.
EPLI insurance coverage ensures that you are not stuck handling these expenses on your own. Businesses of every size and type can be impacted by litigation, and employee lawsuits have increased substantially over the last ten years. An EPLI policy gives businesses peace of mind that when they face an employee lawsuit, they are protected.
The Types of Claims EPLI May Not Cover
Just like other types of insurance policies, such as home or automobile, not every claim will be covered by an EPLI policy. It is not uncommon for disputes between the policyholder and the insurance company to arise.
One of the most common reasons EPLI claims are denied is when the claim is not made during the policy period. Some policies have extended reporting periods or retroactive date provisions that can be complicated. An employment defense attorney can help you identify the most important dates and ensure that your claim is valid. In addition to the reporting period, there are some common exclusions in EPLI policies:
- The employee has experienced a bodily injury.
- Prior acts.
- Claims under some federal statutes (OSHA, NLRA).
- Claims made under employment contracts.
- Claims involving employer fraud.
- The employer has profited from the wrongful act.
Some employee lawsuits can make multiple claims at once. An experienced EPLI attorney can help employers sort through complicated lawsuits and get the most out of their CA EPLI coverage.
Seeking EPLI Coverage in California
EPLI policies are usually not as simple to obtain as other forms of insurance. EPLI providers are sometimes more selective, and these policies can be expensive for businesses that have not taken mitigation measures in their business practices. Before seeking coverage under an EPLI policy, take action to show that you are being proactive in mitigating risk. Mitigations can include written policies against discrimination and mandatory training for employees.
For help with EPLI-related claims, look no further than the Law Offices of Susan A. Rodriguez, APC. Attorney Susan A. Rodriguez has years of experience as a Los Angeles EPLI claims lawyer, so you’ll have peace of mind that your business is protected. To get in touch about EPLI coverage in California, call (213) 943-1323 or fill out this online contact form.
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For legal advice, contact an attorney at Law Offices of Susan A. Rodriguez, APC or an attorney actively practicing in your jurisdiction.