What is employment practices liability insurance?

About employment liability insurance

Employment practices liability insurance protects businesses from lawsuits by employees who claim that their legal rights as employees have been violated.

Employees file lawsuits against companies primarily claiming that they have been victims of discrimination, sexual harassment, or wrongful termination. However, employment practices liability insurance also protects against claims for things such as emotional distress, lost career opportunity, or failure to promote.

This type of insurance is not covered by standard business liability insurance. It must be purchased as a separate policy. For small and mid-sized businesses with employees, this insurance can be purchased as an addition to a Businessowners Policy.

The amount of coverage a company receives is based on the type of business and industry it operates in, how many employees a company has, and if the company has had trouble with employee practices in the past, which is also laid out in business insurance quote.

In the event of a lawsuit, the company is reimbursed for the legal costs of the lawsuit, whatever the outcome or who is at fault. The policy also pays costs associated with any settlements or judgments. This insurance does not, however, pay punitive damages, or any civil or criminal fines associated with the lawsuit. Nor does the insurance pay for any liabilities covered by other insurance policies, such as workers compensation.