Employment Practices Liability Insurance (EPLI)

January 17, 2019

Employment Practices Liability Insurance is coverage for employers to defend against claims made by employees alleging discrimination, wrongful termination, harassment and other employment-related issues.

The Doctors Insurance Agency specializes in affordable complete employment practices liability protection. We are singularly focused on healthcare organization and physician liability insurance, as well as risk management protection.

It is increasingly startling how consistent the increase in expenses required to defend practices and principles against these claims has been.

In addition to claims made by employees, there are also independent contractors, hospital nurses, and employees of outpatient facilities that can allege hostile discriminatory or harassment against physicians and mid-level providers, threatening the financial integrity and future of the organization. It is important not only to protect against common claims for employment related lawsuits, but also claims brought by third parties.

The language of this simple phrase is important when reviewing employment practices liability policies, to make sure that third-party is included.

• Third Party Sublimit Included

For almost 10 years now, standard Medical Professional Liability Insurance policies have provided some defense in a sub limit available to respond when the physician insureds are named on their medical board, hospital credential committee, or federal billing administrative claim. Similarly, there are small supplements available to respond when physicians are accused of creating a hostile work environment. However, specifically protecting the practice and the physicians against claims alleging wrongful termination, failure to promote sexual harassment, or discrimination. These claims can generate crippling expenses, and any practice that experiences financial hardship may find it difficult to overcome without the proper Employment Practices Liability Policy in place.

Since 1992, the healthcare industry has become increasingly more aware of risk management tools and priorities. Some practice managers consider Employment Practices as much a threat and as important as managing the risk of a medical negligence claim.

A claim brought against a successful orthopedic practice in Northern California generated so much expense that the primary physician named in the claim was forced out of the practice, and the group had to read, sign, and reposition their contracts in the community. One employment practices claim completely changed the landscape and the profile and drastically reduced revenue. A couple of years ago in Oregon this headline ran across the state:

Woman wins $1.4 million sexual harassment suit against Eugene neurosurgeon

Posted Aug 10, 2016 Oregonian

EUGENE -- A Lane County jury has awarded a woman more than $1.4 million in a sexual harassment case against a Eugene neurosurgeon and his business….

The article reported that the physician sexually harassed, made sexual advances toward and inappropriately touched of the practice employees.Although the physician continues to deny any wrongdoing, there was evidence to suggest that similar actions were reported on two prior occasions, and six years prior to this claim a female employee had resigned due to continued inappropriate behavior.

In a meeting with one of our anesthesiology groups, it was discussed how the line can blur between a claim against wrongful termination and a claim made by a departed partner or shareholder alleging restraint of trade.

A restraint of trade claim can be brought against the directors of the healthcare group. Many policies for Employment Practices Liability also include a separate limit defending the directors & officers against not only claims of wrongful termination or restraint of trade, but also mismanaging the finances of the group. These directors & officers claims can similarly generate thousands of dollars of expense in areas that require unique and specific expertise and knowledge of the law.

The Employment Practices Liability policies that are used by the Doctors Insurance Agency include access to risk management, human resources advice, and conferencing is available to guide and direct the hard-working physicians and administrators managing the group.

We have had two restraint of trade claims presented against anesthesia groups in the last five years. Both are costly and both were professionally handled without interrupting purpose and focus of the anesthesia group.

Underwriting is easy: the applications are short, and the policies normally include a large deductible to keep the premium for Employment Practices Liability insurance manageable. With the relatively soft and affordable market for medical professional liability, it makes perfect sense to consider a combination limit of employment practices. Contact the Doctors Insurance Agency to discuss and review this important insurance.