Since Title VII of the Civil Rights Act of 1964 was enacted, employees' rights in the workplace have remained a frequent source of disputes and litigation for employers involved in interstate commerce.
As more workplace protections and employment laws have developed, employers face a higher risk of lawsuits, especially those alleging discrimination. To reduce that risk, employers should create workplaces that offer equal rights, access to jobs and training, consistent working conditions, and fair opportunities for advancement.
Between the early 1990s and the mid-2000s, the Equal Employment Opportunity Commission reported a noticeable rise in individual discrimination charges. High-profile cases also increase public attention and the likelihood of similar claims.
One well-known example involved a large retailer that was the subject of a class-action suit alleging systemic discrimination in pay and promotions. The U.S. Supreme Court ultimately ruled the class could not proceed because the plaintiffs' circumstances were too varied to meet the requirements for a single nationwide class.
Smaller employers should study how larger companies handle personnel policies. When policies are clear, documented in an employee handbook, and communicated to new and existing staff, fewer disputes arise and the company is better prepared if a claim is filed.
Even careful compliance does not eliminate the possibility of allegations. Employers are often reassured to have coverage in place; for background on coverage, consider Importance of Employment Practices Liability Insurance as a starting point for understanding protection options.
Workplaces are increasingly diverse, and cultural differences can be a root cause of complaints. Alongside harassment and disability or age-related claims, these issues can expose employers to costly legal defense and settlements.
To learn more about what this type of coverage typically covers and how it applies to specific employers, see Understanding Employment Practices Liability Insurance.
Smaller businesses should also consider related protections depending on their governance and staffing structure; for an overview of executive-level coverage that can include employment-related practices, review Directors and Officers Liability Insurance.
Beyond buying appropriate insurance, employers should regularly assess workplace risk, maintain up-to-date policies, educate managers on fair hiring and disciplinary practices, and document actions consistently. These steps both reduce real risk and improve an employer's position if a claim arises.
When you need to review coverage options or get a tailored quote, consider taking the next step and talk to an agent who can help assess risks and recommend appropriate limits and endorsements.
Frequently Asked Questions
What is EPLI?
EPLI (employment practices liability insurance) helps cover defense costs and damages from claims such as discrimination, harassment, and wrongful termination.
Does a small business need this coverage?
Small businesses can be vulnerable because even a single employment claim can be costly; coverage is often recommended based on risk and staff size.
What steps reduce the likelihood of a claim?
Clear written policies, regular training, consistent documentation, and fair, documented personnel actions help reduce exposure to employment-related claims.
If a former employee files a claim, what should an employer do first?
Preserve records, notify your insurer promptly, and consult counsel or your agent to coordinate a response and coverage handling.