Employment Practices Liability Insurance (EPLI)

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Employment Practices Liability Insurance (EPLI)

Employment practices liability (EPL) insurance is a type of liability insurance that covers improper activities in the hiring and firing process and employment policies. It provides protection against charges of wrongful termination, negligent evaluation, wrongful discipline, breach of employment contract, denial of career opportunity, sexual harassment, discrimination, retaliation, and mishandling of employee benefit plans, among other forms of employee litigation.

The cost of this form of insurance is determined by a variety of factors, including the nature of the firm, the number of employees, and the number of lawsuits filed in the past. The corporation will be reimbursed for the costs of defending a lawsuit, including judgments and settlements, under this policy. It can also pay legal fees, regardless of whether the corporation wins or loses the case.

Although EPLI can be purchased separately, it is typically provided as part of a management liability package policy. Management liability package plans include coverage for employment practices liability in addition to directors and officers (D&O) and fiduciary responsibility (EPL).