Employment Practices Liability Coverage
HSB's Portfolio Employment Practices Liability (EPL) is designed to protect small commercial businesses with 50 employees or less. It provides insurance for liability damages and defense costs due to claims brought by full-time, part-time, seasonal or temporary employees who allege employment discrimination, wrongful termination, or sexual harassment. Optional coverage for claims brought by business customers and vendors is available. HSB offers this program through selected insurance company partners serving small and medium-sized businesses who want to enhance their business insurance policies.
Turnkey Reinsurance Program
HSB’s Portfolio EPL Coverage is a turnkey, outsourced reinsurance program, branded for the issuing insurer. It is designed to be included within businessowner (BOP) policies, commercial packages or workers’ comp policies written for businesses with 50 or fewer employees. This approach is easier for insureds and their agents because it does not require a separate EPL application and they do not need to collect additional underwriting information.
By insuring a portfolio of business HSB can make the coverage much less expensive than individually underwritten EPL policies. HSB has helped more than 200 insurers successfully integrate specialty coverages in their commercial package products. HSB's turnkey program includes form development, filings support, underwriting assistance, marketing support, agent and insured education, claims adjustment and loss prevention.
Value of Portfolio EPL
HSB’s Portfolio EPL program offers these benefits:
- Provides broad EPL coverage and meaningful limits at reduced premiums;
- Eliminates the transactional underwriting process and the handling cost of issuing separate EPL policies;
- EPL loss prevention website that provides model employment policies and procedures, best practices checklist, on-line training modules and other employment law news and information;
- Specialized EPL claim services with access to specialized EPL legal representation to respond to employers in the event of a claim;
- Helps fill a coverage gap and reduce agent E&O potential;
- Limits are available on a portfolio basis up to $250,000 for accounts with 50 employees or less;
- Higher limits of $500,000 and $1 million are available by referral;
- EPL coverage is also available by referral for accounts with 51 to 250 employees.
EPL Risk Management
Small businesses do not have the resources to protect themselves from employment practices lawsuits. Typically they have no staff attorneys, human resource professionals or formal procedures to guide them in making employment decisions such as the hiring and termination of employees. As a result, small businesses are more prone to acts that could constitute employment discrimination, wrongful termination or sexual harassment.
HSB’s program includes risk management services to help employers prevent employment related claims and help them respond in the event of an EPL claim, including:
- Online EPL risk management training, model employment policies and procedures;
- EPL claim specialists;
- High quality legal representation from law firms experienced in employment practices liability.
Small Business EPL Risks
Every business has employment practices liability exposures. Between 1999 and 2003 more than 400,000 charges were filed under all statutes enforced by the Equal Employment Opportunity Commission. During that time, claimants were awarded more than $1 billion. And more than 50 percent of EPL charges are brought against smaller businesses.
An EPL charge or suit can cost small business thousands of dollars in damages. Although 75 percent of all claims are found to be groundless, they still require significant expenditures to defend.
Comprehensive General Liability coverage does not cover the types of injuries and damages typically alleged in employment related claims.