A number of laws dictate how employers are allowed to treat employees, and failing to follow any of these regulations can have significant financial consequences for a company. For, any employee who has been wronged may file a claim or suit against the business that wronged them. Employment practices liability insurance helps protect Massachusetts businesses from covered liability suits and claims that accuse businesses of violating employment practices laws.
Employment practices liability insurance (EPLI) policies are a specialized form of liability coverage. It’s specifically designed to protect businesses and other organizations from potential lawsuits and claims filed over businesses’ employment practices.
While exact coverages vary, a policy might offer coverage for the following types of incidents:
Most EPLI policies begin providing protection as soon as a business is accused of a covered infraction. Policies will generally start providing resources for a business’ defense as soon as an accusation is made. They’ll also typically cover any settlements that are eventually agreed to or assessed (up to the policies’ limits).
Most businesses in Massachusetts that have one or more employees should consider getting EPLI coverage. After all, any business that hires an employee, or even just interviews one for a potential job, can be accused of violating federal or state employment laws.
Additionally, many nonprofits in the state may also want to get EPLI coverage. For instance, a church in Boston, MA, homeless shelter in Springfield, MA, food pantry in Worcester, MA or library in Northampton, MA might all want a policy. Not only will many of these nonprofits likely have employees, but they can also often use the protections that EPLI coverage offers to protect themselves from similar incidents involving volunteer workers.
Businesses that want or need EPLI should obtain coverage prior to placing their first job opening. Most policies include coverage for hiring decisions and practices, but only if incidents involving hiring occur during the policy’s effective period. Thus, businesses that want protection for this portion of hiring employees should get a policy before beginning the hiring process or interviewing candidates.
Nonprofit organizations, similarly, should obtain coverage before interviewing paid job applicants or volunteer applicants. If a nonprofit doesn’t have coverage while volunteers are being selected and someone feels they were discriminated against in the selection process, a nonprofit likely won’t have protection for the claim.
While following all employment laws is one of the best ways to protect a business, it’s not a foolproof measure against employment-related claims and lawsuits. For, any prospective, current, or former employee could file a claim or lawsuit. Even if a claim or suit is unfounded, defending a business against an employee’s allegations could prove costly.
For this reason, it’s still a good idea for businesses to carry an EPLI policy. A policy can act as a backup measure, just in case a business needs one.
Businesses and nonprofit organizations in Massachusetts that would like to learn more about employment practices liability insurance should contact a business insurance agent near them. An agent can help explain this coverage in more detail, and they can help a business or nonprofit explore ways to get coverage.