EPLI or Employment Practices Liability Insurance is a type of insurance that business owners and companies acquire to protect the company from liabilities which was caused by their employees. Small and large scale business will always have employees and there is a great possibility that customers might experience physical injury or property damage which was caused by the company employees.

These acts were not made deliberately to injure the person or to the property. Even with quality assurance and training, there are times that property damage may happen because of an accident or honest mistake. When that happens, the EPLI should be able to provide the company financial and legal support for claims.

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Difference of EPLI to General Liability Insurance

Other companies have opted to consider GLI or General Liability Insurance for their business instead of EPLI. Those that have the GLI as their insurance policy can use the liability protection in anyway – manmade or not. At first glance, General Liability Insurance might be the right type of insurance for most companies. But the more employees they have, the need for EPLI also increases.

The obvious difference of EPLI to GLI is its coverage. Instead of covering the entire business area, EPLI covers the employee’s acts whether or not they are in the office as long as they are doing their function. Business could easily use EPLI for area related accidents to EPLI as these are caused by the negligence of the employees. Because an employee was not able to do their job well, certain conditions in the business environment will be affected. Because of that negligence, the EPLI could be applied if someone will be injured within the business premises.

Another key difference of EPLI to GLI is the application of coverage. When the report of injury was only made years after the incident, the GLI will provide coverage based on the time the accident happened. On the other hand, EPLI will provide coverage on the time the accident was reported or on the time the business owner. This means the injured party might be able to receive more if the coverage of EPLI increases.

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Basic Assistance from EPLI

Employment Practices Liability Insurance offers a “duty to defend” their clients. That means when a company is facing liabilities based on employment practices, the EPLI should be able to provide legal counseling. However, the EPLI provider has the right in choose the legal counsel which will represent the business. The company has the right to use the counsel as part of their legal team or refuse the services of legal counsel.

The EPLI provider should be able to provide assistance during the “hammer” clause. This type of clause is basically an assistance based on settlement. When the company has opted to compromise or negotiate with the injured party, the EPLI provider could assist the company in providing compensation.

EPLI is a very smart type of insurance that’s highly recommended for businesses. It offers protection for employee’s malpractice which could happen and will cost the business millions without insurance.