You have put forth the time and effort to start your fledgling business.  You have done your due diligence, planned accordingly, and now your business takes off.  Business is so good, in fact, you need to hire employees (or add to your existing workforce).

Then, you are forced to remove one of your workers.  It could be for a myriad of reasons, none of which are (obviously) discriminatory or retaliatory.  But no matter, that employee turns around and sues you and your business.  Are you covered for such a situation?

Employee Practices Liability Insurance (EPLI) is (or should be) an integral part of every business insurance program.  It protects you (and your business) from the following type of claims:

  • Mismanagement of employee benefits.
  • Sexual harassment.
  • Wrongful termination of employment or an implied contract.
  • Wrongful discipline or demotion of an employee.
  • Slander or libel.
  • Discrimination based on age, gender, religion, race, or other factors.
  • Breach of an employment contract.
  • Privacy invasion.
  • Emotional or mental distress.
  • Negligent decisions related to hiring, promotions, or compensation.

More often than not, the claims made by the employee (or former employee) are unfounded.  While the cost of defending such a lawsuit vary with the type of claim being asserted, defense costs can be very significant, especially for a small business.  EPLI covers not only the defense costs, but the amount of any settlement, saving the business owner time and expense.

One of the more attractive features that is offered for many types of EPLI policies is the insured’s ability to select its own litigation counsel if a lawsuit is filed.  This provides the insured an opportunity to choose its own attorney – someone who has knowledge of the particular market, or with whom the insured has a certain comfort level.

Check with your insurance agent today to see if you are covered for these types of employment related claims and lawsuits.

Madden & Madden has litigated employment-related claims for over 35 years. For more information, visit  



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