What is Professional Liability and Employment Practices Liability?
Professional Liability Insurance, also known as Errors and Omissions (E&O) insurance, helps protect businesses and professionals from claims related to mistakes, negligence, or failure to deliver services as promised. Employment Practices Liability Insurance (EPLI) provides coverage for claims made by employees alleging discrimination, wrongful termination, harassment, and other employment-related issues.
Who Needs It
Professional Liability and EPLI coverage is essential for any business or individual providing professional services or employing staff. This includes consultants, healthcare providers, architects, engineers, attorneys, and small business owners. Companies with employees, regardless of size, can benefit from EPLI coverage to protect against employment-related lawsuits.
What It Typically Covers
Coverage may include:
- Claims of professional negligence or failure to perform services
- Legal defense costs and settlements
- Allegations of discrimination or harassment in the workplace
- Wrongful termination or breach of employment contract
- Defamation, invasion of privacy, and emotional distress claims related to employment
Common Exclusions and Limitations
These policies typically do not cover:
- Criminal acts or intentional wrongdoing
- Bodily injury or property damage (covered under general liability)
- Unpaid wages or benefits disputes
- Workers’ compensation or unemployment claims
- Claims covered under other types of insurance
Factors That Influence Cost
The cost of coverage depends on several factors, including:
- Type of business and industry risk level
- Number of employees
- Business size and revenue
- Claims history
- Coverage limits and deductibles chosen
Proof of Insurance and Compliance
Proof of Professional Liability or EPLI coverage may be required by clients, vendors, or regulatory bodies. Many contracts and employment agreements require businesses to carry these policies. Requirements vary by state and industry, so it’s important to verify local regulations.
How to Get a Quote
Getting the right coverage starts with a customized quote. Get a professional liability and EPLI quote today.
Frequently Asked Questions
What is the difference between general liability and professional liability?
General liability covers physical injuries and property damage, while professional liability covers mistakes or negligence in professional services.
Does EPLI cover claims from former employees?
Yes, EPLI can cover claims made by former employees, such as wrongful termination or discrimination, if the incident occurred during the policy period.
Is professional liability insurance required by law?
It is not always legally required, but many clients or contracts may require it before starting work.
Can small businesses benefit from EPLI?
Yes, small businesses with even a few employees can face employment-related claims and benefit from EPLI coverage.
Are contractors and freelancers eligible for professional liability insurance?
Yes, independent contractors and freelancers often carry professional liability insurance to protect themselves and meet client requirements.
Still have questions? Talk to a local insurance expert.