Employment Practices Liability Insurance – Hindsight is 20/20

Today my client forwarded me a letter received in the mail from an Employment Law Firm alleging the following from a former employee:

👉 Retaliation
👉 Discrimination
👉 Harassment
👉 Failure to Provide Meal Periods
👉 Failure to Provide Rest Breaks
👉 Failure to Issue Accurate & Itemized Wage Statements
👉 Failure to Indemnify
👉 Failure to Provide Wages Due Upon Termination

-Client: “Does this fall under any insurance we have?”

-Me: “This unfortunately doesn’t fall under general liability or work comp. This would be under Employment Practices Liability Insurance which we touched on back in June.”

You see, together we went through the process of completing an application and taking it out to market for quotes seven months ago.

Pricing came in between $19k-$25k annually depending on the limits and retention/deductible chosen.

Due to the cost, my client elected to pass this time around.

Hindsight is always 20/20, but I am afraid this allegation is going to result in an expense for my client that will significantly eclipse the annual premium and retention that ultimately would have been paid for an EPL insurance policy quoted last June.

EPL is one of those coverage’s I cannot recommend enough, especially in this litigious hotbed of Southern California.

In my 16+ years in this profession, I have told this story more times than I can count with my fingers and it’s a terrible feeling to have to explain this in a time of need.

Managing people is arguably the toughest part of running an business.

I encourage you not to overlook Employment Practices Liability insurance for your organization. This area of coverage is NOT included within a Workers Compensation or General Liability insurance policy. It is a separate policy in itself.