Employment practices liability insurance explained:


The Doctors’ Company  has worked hard to continue a working relationship with the experts at NAS Insurance Services to bring affordable, effective and expert coverage to our policyholders.   In addition to providing administrative, billing inquiry defense and representation insurance and electronic record confidentiality and data breach insurance,  The Doctors’ Insurance Agency works with the underwriters at NAS (Lloydsof London) to provide employment practices liability insurance.           

What is Employment Practices Insurance?

Employment Practices Liability Insurance is a relatively new (relative to the decade’s old coverage that is provided by so many carriers covering so many traditional types of risks.

This form of liability insurance provides protection for an employer against claims made by employees, former employees, or potential employees. (so, in that regard, there is some retroactive coverage built into the product (as long as the claim was not known and not reported prior to coming in).

It covers discrimination (age, sex, race, disability, etc.), wrongful termination of employment, sexual harassment, and other employment-related allegations. It covers your firm, including its Directors and Officers against the financial damage that ensues, largely in the way of expense to defend the claims.                             

When do I need Employment Practices Liability Insurance?

Employment Practices Liability Insurance is needed as soon as you start to hire employees. There is an argument that the smaller the group, the less likely you are to need this insurance, intuitively, while that is true, it is also important to protect the principal from even the remote risk of a lawsuit in this area from just one or two employees.

Most investors and directors will require that you carry this coverage as part of your Directors and Officers Liability Insurance since they can also be held liable in suits relating to employment practices.                     

Why do I need Employment Practices Liability Insurance?

Cases against employers are on the rise.  The state laws are increasingly written to protect employees, even encourage back pay wage disputes, failure to promote and negligent management of  the working environment.

It is estimated that three out of five firms will be sued by an employee.  Most of the cases are without real merit, many are innocent misjudgments without real damages; and, in this time, the companies are required to defend their good name and the social network identity that can so rapidly change when employment practice liability claims arrive.

Companies are finding that they are vulnerable from the pre-hiring process through the exit interview, even if the employee was never hired, or only at the company a matter of days.

It can happen to ANY firm. There might be  harmless joke told in the break room, a joke or anecdote considered harmless can be a very damaging offense to others.   Every employer faces the reality that it will be the target of legal action from past, present and prospective employees.

Healthcare organizations are  especially vulnerable to employment practices liability claims.  There is such a heightened awareness of the working environment, equal treatment, decent and appropriate communications;  Newer and fast growing medical groups are often prey to these types of claims because their management team has not yet designed or implemented procedures for hiring, firing, and disciplining employees.

We definitely recommend Employment Practices Liability Insurance to any company that has employees.

Health Care Employment Practices Liability Insurance (EPLI) coverage from The Doctors Company is tailored to meet the unique needs of the clinical or practice setting and offers coverage for the legal defense as well as the cost of damages and judgments arising from employment-related claims, including:

  •     Wrongful Termination
  •     Wage and Hour *
  •     Discrimination
  •     Sexual Harassment
  •     Retaliation
  •     Disclosure of confidential employee information resulting in identity theft
  •     Whistleblower
  •     Violations of Family Medical Leave Act or similar state or local law
  •     Breach of an employee’s federal, state, or local civil rights.

Health Care EPLI coverage includes:

  •     HReSource(TM)
  •     HReSource offers risk management services and provides an unlimited HR support center, online training programs, and     Internet-based HR management system features and tools.
  •     Duty to Defend Provision

    If a claim is made against you for an alleged wrongful act, applicable fees will be paid directly to your legal defense.



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