EPLI Insurance in Texas

What is EPLI insurance? 

Hiring employees is essential for growing many Texas businesses, but it comes with certain risks that businesses ought to consider. The consequences of a discrimination or similar allegation filed against a business can be devastating if EPLI insurance isn’t in place.

EPLI insurance offers specialized liability coverage for employers. Policies generally help shield employers from a variety of discrimination and similar lawsuits that employees could file.

Which businesses in Texas is employment practices liability insurance for?

Almost every business in Texas with one or more employees can benefit from employment practices liability insurance. Any employee might allege discrimination.

Businesses may want coverage even before hiring their first employee. EPLI could also cover discrimination claims filed by applicants who ultimately aren’t hired.

What scenarios does employment practices liability insurance typically cover? 

EPLI policies can cover a range of discrimination and some other allegations, depending upon the specifics of a policy’s terms. Coverage for scenarios like the following is usually available:

• Intern not being paid for work that should’ve been paid
• Female employees being paid lower salaries than male colleagues
• Older employees being forced out because of their age
• LGBTQ+ employees being denied advancement opportunities others have
• Racial minorities being assigned menial work that’s below their position
• Interviewers asking about pregnancy, immigration or another off-limits topic
• Interviewers not notifying applicants of background checks that’ll be run
• Employees finding a work environment generally hostile

In the event of a covered incident, a policy normally covers attorney charges, court fees and settlements (subject to any deductible and limit). This is what most liability coverages pay for covered claims.

Does EPLI extend its coverage to allegations made by volunteers?

Some EPLI policies may offer extended coverage that includes discrimination claims made by volunteers. 

This can be especially important to nonprofits that have sizeable volunteer numbers, as volunteers could make many of the same discrimination claims that employees are able to allege. Even if someone’s unpaid, they could still allege that they were discriminated against because of gender, sexual orientation, gender, age or another prohibited reason.

If coverage for volunteer-made allegations is needed, a specialized EPLI agent can help nonprofit organizations look for a policy with such protection.

Does workers compensation cover employment discrimination? 

Workers compensation can provide important protection against on-the-job injuries and illnesses, and Texas businesses with employees normally should carry this too. It’s not a substitute for EPLI, however, as workers comp usually doesn’t protect against non-injury incidents.

For employment discrimination and related issues, EPLI is typically needed.

Does EPLI offer protection against third-party discrimination claims? 

Certain EPLI policies provide coverage against discrimination allegations made by third parties, such as vendors or customers. This isn’t a standard feature, however, and isn’t available in many policies.

Businesses that want protection against third-party discrimination claims can work with a specialized insurance agent to check policy coverages, seeing which may offer this coverage.

How much do businesses pay for employment practices liability insurance?

The cost of employment practices liability policies can vary, with factors such as the following frequently affecting premiums:

• Industry and annual revenue
• Number of employees
• Employee turnover rate
• Hiring and termination practices
• Recent EPLI claims (if any)

An independent insurance agent can help businesses check how much their rates would be. Independent agents are able to compare policy quotes from several insurers.