Employee Practice Coverage

You trust your employees. You know they are going to do great work for you. They are the face of your company, after all. Why do you need to think about employee practice coverage, then? Called employment practices liability insurance (EPLI), this type of protection is very important for nearly all companies today. It helps cover your business from claims those well-supported workers may make against your company.

Your Employees Wouldn’t Do That

The fact is, mistakes happen. Miscommunications happen. Sometimes false claims happen, too. With employee practice coverage, you’re able to have financial protection in place just in case something goes wrong, and that puts your business at risk.

It can happen to all companies. Claims may involve situations such as:

  • Sexual harassment
  • Negligent evaluation
  • Wrongful termination
  • Wrongful discipline
  • Discrimination of all types
  • Failure to promote or employ
  • Deprivation of career opportunity
  • Wrongful infliction of emotional distress
  • Poor management of employee benefit plans
  • Breach of contract

There is an increasing number of lawsuits filed by employees against their employers for reasons such as these. Most companies do not set out to end a contract for an employee for the wrong reasons. Most companies have strong sexual harassment policies in place. Yet, when a lawsuit and a claim like this occurs, it can create costly consequences for your business. That’s why it is important to choose financial protection to minimize those potential losses.

What Does This Coverage Do for You?

It can help you in several ways. First, it helps you by providing legal defense for claims and lawsuits filed against your company. This is a critical factor because it can create a situation in which your business has to spend significantly to defend itself, even if the claim is not valid.

Further, if a claim goes through, a judge orders a judgment, or the company needs to settle the claim to rise further exposure, it becomes critical to have this type of financial coverage available. It can help to pay for those losses, up to the amount of coverage you have.

There is no company immune to these risks. There is simply no way to protect against all claims. Yet, with employment practice coverage, you can reduce at least some of the risk of financial loss from those claims.

Insurance Term of the Day: Commercial Insurance

You hear about insurance almost everyday. Insurance affects our lives more than you know. When you go out to eat, the restaurant is insured. When you go to a doctor or to the grocery store, every business you visit must have insurance. Typically, when referring to insurance, you may think of what’s known as “personal insurance,” which includes auto, home, motorcycle, RV, health, etc. Commercial insurance is a whole different ball-game that you may not have even thought about before.

There are many layers to commercial insurance that would take a book thicker than an encyclopedia to explain it. However, in summary, commercial insurance is insurance for businesses that provide a service or a product. The business could be held liable for injuries and/or damages to consumers. Coverage is also for things like theft and property damage.

What are some common types of commercial insurance? 

  1. First and foremost, property insurance. Business owners need this coverage to protect their business building and business personal property in case of a loss. If there is an unexpected fire or other damage, this coverage provides the protection needed.
  2. Builder’s risk insurance. This coverage is to protect buildings while in the process of being constructed.
  3. Mechanical breakdown coverage. This coverage provides protection for the accidental breakdown of equipment and machinery. Intentional damage is not covered.
  4. Crime insurance. The purpose of crime insurance is to provide protection from theft and burglary on the property. This includes money, up to a specific amount.
  5. Business interruption insurance. If there is any lost income or other expenses, business interruption helps recover the lost money. Salaries and net profits can be replenished after having to close the business due to property damage.
  6. Inland marine insurance. When property is in transit, off premises in storage, or between locations, it is covered by this coverage.
  7. Debris removal coverage. Any debris on the property as a result of a fire, windstorm, etc. is covered with this coverage.

There is so much more to commercial insurance. If you are a business owner, you know that this is just the tip of the iceberg.

By: KayLynn P.