In 2020 alone, the COVID-19 recession led to the permanent closure of at least 100,000 small businesses in the U.S., as reported by the Washington Post. While some of these businesses closed due to lack of demand for their offerings, others did so because they were unable to meet the set COVID-19 workplace safety regulations such as social distancing. However, with more people adopting the new normal, businesses are gradually reopening, albeit cautiously. Still, employees could contract the virus at the workplace, exposing employers to lawsuits related to COVID-19. Thankfully, employment practices liability insurance (EPLI) coverage can help you stay in business amid the pandemic. Read on to find out how.
What Is EPLI Coverage?
This insurance policy covers the employer against EPLI exposures, which arise when an employee feels that his/her legal rights have been violated. For instance, per the Insurance Information Institute (III), your employee can sue if you don’t take any action concerning a sexual harassment claim.
Basics of EPLI Coverage
Any complaint from an employee can result in legal implications such as paying fines and claims, losing your business license, and even serving a jail term. To give you an idea, U.S. businesses face a 12% percent chance of being sued for employment-related issues, with California being among the top states that face a higher risk, according to the Insurance Journal. To protect employers, an EPLI policy covers the legal costs and claims stemming from situations such as:
- An employee files a complaint of being discriminated against based on his/her ethnicity
- A worker claims you have wrongfully terminated his/her contract
- Failure to pay employee benefits
- An employee alleges you’ve upset him/her emotionally
- Your staff sues you for lack of necessary protective equipment at the workplace
- Failure to implement employee practices and policies
In general, an EPLI policy covers employment status claims, discrimination claims, privacy rights claims, and negligence claims.
EPLI Insurance for COVID-19
According to the U.S. Equal Employment Opportunity Commission (EEOC), the federal government requires every business to adhere to anti-discrimination laws at the workplace. While this, and other policies, help to keep employees happy at work, the COVID-19 pandemic is a new threat to the workplace environment. More specifically, employees working from the business premises face a higher risk of contracting the virus than those working from home. Businesses that have opened their doors for their employees should brace themselves for possible litigations arising from instances that include:
- Employee claims due to alleged lack of protection from the virus
- A returning employee claims compensation alleging he/she contracted the COVID-19 virus at the workplace
- An infected employee alleges you and other employees discriminated against him/her
- A worker claims you exposed his/her medical information to other employees
For protection against such claims, you should purchase the right EPLI insurance policy for COVID-19. This policy will cover your business against any such claims, enabling your business to stay afloat during the pandemic. You can help prevent such lawsuits and claims by putting in place effective measures and policies that protect your employees from the virus as well as daily workplace issues such as harassment.
This is how EPLI coverage can shield your business from employee lawsuits during the pandemic. You can further reduce risks by purchasing other business insurance policies, including business interruption insurance. At Hoffman Brown Company, we will provide you with genuine business and personal insurance policies. To get started, contact us today!