More than 98,000 small businesses in Arizona have employees, and these companies employ approximately one-third of the state’s private workforce.
Any time you hire workers for your business, you take on the risk that they may one day find a reason to sue your company. Even when the cases are entirely without merit, costs for legal defense can build up quickly. That is why having an employment practices liability insurance policy is so important.
If you are interested in learning more about employment practices insurance, you can talk to one of the many independent insurance agents in Arizona. These agents can answer your insurance-related questions and can help you find a reliable policy at a competitive price. Find an insurance agent near you to get started.
What Is Employment Practices Liability Insurance?
Employment practices liability insurance, or “EPLI,” is a type of commercial liability insurance product that is designed to cover employers against financial losses related to accusations of illegal employment practices like discrimination and harassment.
Who in Arizona needs employment practices liability Insurance?
If you have employees, you can benefit from the protections offered by an EPLI policy. While the Insurance Information Institute reports that most employment practices suits are filed against large corporations, they warn that no company, regardless of size, is immune to this hazard.
A recent study found that employers in the US have an 11.7% chance of one day facing an EPLI lawsuit.
Taking into consideration that in 2018, the average cost to settle an EPLI lawsuit out of court was $75,000 and in front of a jury was $217,000, it is easy to see why a policy can prove invaluable to protecting your company’s finances.
How Much Does Employment Practices Liability Insurance Cost in Arizona?
Rates for EPLI coverage can vary from one business to the next. Considerations that can influence how much a policy will cost for your Arizona business include.
- The number of people you employ
- The average rate of employee turnover your company experiences each year
- What efforts your company’s HR department has made to prevent potential employment practices lawsuits
- Your company’s EPLI claims history
- The amount of coverage you are purchasing
- The size of your deductible
In the United States, employers pay an average of about $800 a year for EPLI coverage while mid-sized companies spend about $3,000 per annum. If you own a large corporation that has thousands of employees, your coverage costs will be considerably higher.
Local independent agents can help you obtain and compare a few customized quotes so you can be certain that the policy you choose to buy offers the coverage you need at a reasonable price.
What Does Employment Practices Liability Insurance Cover?
Your employment practices liability insurance policy is designed to cover expenses such as court costs, legal fees, and damages if your company is accused of illegal employment practices, regardless of whether or not the courts rule in your favor.
Examples of covered accusations include the following.
- Sexual harassment
- Wrongful termination
- Discrimination based on age, sex, race, or other factors
- Breach of employment contract
- Infliction of emotional distress
- Mismanagement of employee benefits
Some insurance companies may offer more complete coverage than others, so it is a good idea to compare a few different policies and quotes before you decide on which offers your company the best value. Independent insurance agents in Arizona can help.
What Does Employment Practices Liability Insurance Not Cover?
Depending on which insurance company you go with, you can expect a few exclusions on what your EPLI policy will cover. Some things that many insurance companies will not cover include the following.
- Assessed punitive damages, criminal fines, or civil fines if your company is found guilty of illegal acts.
- Liabilities that are covered by other policies such as workers’ compensation insurance.
- Incidents involving violations of the National Labor Relations Act (NLRA), the Worker Adjustment and Retraining Notification Act (WARNA), the Occupational Safety and Health Act (OSHA), or the Employee Retirement Income Security Act (ERISA).
- Privacy violations resulting due to a computer breach.
If you have questions about your EPLI policy’s limitations, you can turn to a local independent insurance agent for answers.
Employment practices liability insurance vs. employment liability insurance
It is important to be aware that employment practices liability insurance is different from employment liability insurance, which your company might already carry.
- Employment practices liability insurance: This covers employers against lawsuits related to accusations of illegal employment practices.
- Employment liability insurance: This covers employers against financial losses resulting from worker injuries or occupational illnesses that are not covered by workers’ compensation insurance.
A local independent agent can explain these two types of insurance as well as all of your other business insurance policy options.
How Can Arizona Business Owners Find the Best EPLI Coverage?
The easiest way to secure a good EPLI policy at a reasonable price is by contacting an independent insurance agent. Because they do not work for a specific insurance company, these agents are free to request customized quotes from a variety of top-rated providers as they work to find the coverage you need at the most competitive rate.
There are more than 400 independent agents in Arizona who are ready to help. Set up an obligation-free consultation with an insurance agent near you to learn more.
TrustedChoice.com Article | Reviewed by Jeffrey Green
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