Buying the Right Employment Practices Liability Insurance Policy

Risk Management

PUBLISHED ON: November 1, 2011

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As the American economy struggles to recover from recession, employment-related lawsuits are rising at an alarming pace. The United States Equal Employment Opportunity Commission (EEOC) reported that for fiscal year 2010, private-sector workplace discrimination charges filed with the agency nationwide reached an all-time high of 99,922.

Employment suits arising out of employees’ use of social media are burgeoning, as are “wage and hour” class-action lawsuits, which carry with them the potential for hundreds of millions of dollars in liability. Consequently, companies seeking to minimize exposure for employment-related lawsuits need to exercise considerable due diligence in the purchase of employment practices liability insurance (EPLI) policies. While EPLI policies potentially offer broad protection against the most prevalent risks, purchasing the wrong policy may radically diminish the value of the insurance.