What is the one insurance coverage business owners don’t usually have
If you own a business in New York you may have heard of the term Employers Practices Liability Coverage or otherwise known as EPLI.
Even if you have heard of it there is a good chance that your business does not carry this optional coverage.
First, let’s discuss what EPLI- Employers Practices Liability Insurance is.
EPLI coverage is the coverage that offers protection for your business if you are sued by an employee.
EPLI is a type of professional liability insurance that covers so-called wrongful acts. Some examples of things that employees sued for are:
- discrimination based on age, gender, race, orientation, or others
- sexual harassment
- violations of the Americans with disabilities act
- Wrongful termination or demotion
- Failure to promote
- Invasion of privacy
- Negligent compensation
- Libel, slander or defamation
- Wrongful discipline
- breach of contract
- wage claims
- Failure to obey the Family medical leave act
These are just some of the things that employees can potentially sue for, and what EPLI coverage is going to help protect your business against.
Why most businesses don’t have this coverage?
There are two main reasons why a business owner’s in New York do not have this coverage as part of their insurance protection.
- They do not know about the coverage. They have never been explained and educated what is at risk.
- They know how expensive it is and it is worth the risk to them not to have it.
As mentioned, this is optional coverage for business owners. Unlike coverage like Liability, Auto, Worker’s compensation, or Short term disability & paid family leave, EPLI is extra coverage and no one is asking or checking upon whether you have it or not.
With that, insurance agents and business owners overlook it. Just like they would with Cyber Liability.
And just like Cyber liability, the cost of EPLI coverage is expensive.
Why is EPLI coverage expensive
EPLI coverage is expensive because of not every business owner carriers this coverage. Meaning there is less money in the insurance company’s pot to pay out claims.
The other reason is that these claims tend to be large. You are dealing with employee’s jobs and livelihood, and if an employee is going to file a lawsuit then what is at stake is usually large.
High turnover and a large number of employee businesses have a great risk at a claim but also see the brunt of the large premiums. A business like a restaurant can see up to 50 employees, a lot of which are part-time, seasonal, or short stay.
That industry who might need this coverage the most also has to pay significantly more, making it less affordable to the small restaurant owner.
New York Business Owners
If you currently do not have this coverage or have never heard about it then it might be time for a review of your insurance policies. Contact your agent today for a review.
If you don’t have a relationship with an agent or want a new review of your insurance then click the button below to schedule a review with one of our trusted insurance advisors.