8 Things to Know About Employer Practices Liability Insurance

epli-insuranceWe live in a litigious society. These days, it is difficult to terminate employment or run a business without the risk of a lawsuit. More and more people in this country are suing employers for wrongs, whether real or perceived, and companies, particularly small businesses, are paying the price. Your business policy’s liability insurance may not protect you from this sort of lawsuit. Instead, you will need employment practices liability insurance (EPLI).

Here’s some interesting things you need to know about EPLI.

1.) According to a study of employment practices litigation data released by Hiscox in April 2014, the average U.S.-based business with at least 10 employees has a 12.5 percent chance of having an employment liability charge filed against them.

2.) California, Illinois, Alabama and Mississippi, as well as the District of Columbia, are the top five riskiest areas for employee lawsuits (Hiscox).

3.) The lowest risk states for EPLI charges include Kentucky, Massachusetts, Michigan, Washington and West Virginia (Hiscox).

4.) During the fiscal year of 2011, 15,796 individuals filed 16,974 complaints alleging employment discrimination against the federal government (Equal Employment Opportunity Commission Annual Report on the Federal Work Force Part I, EEO Complaints Processing).

5.) Wage and hour lawsuits in federal court have increased for seven straight years and have increased 438 percent since 2000, according to information from law firm Seyfarth Shaw LLP.

6.) 7,764 Fair Labor Standards Act (FLSA) cases were filed as of March 31, 2013, up 10 percent from 2012, according to the Federal Judicial Center.

7.) As of March 31, 2014, wage and hour lawsuits increased to 8,126, up 4.7 percent over the prior 12-month period. (Federal Judicial Center)

8.) Large insurers focused on all sizes of insureds raised rates for EPLI coverage by 10 percent in 2013, according to The Betterley Report’s December 2013 “Employment Practices Liability Market Survey”.

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