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Agent to Agent: What Every One of Your Commercial Clients Needs to Know About EPLI

By Jim Lloyd, President
Lloyd Pro Group

As your commercial clients’ reliable insurance professional, your clients trust you with their coverage needs and to help protect their companies in the event of a loss. You likely provide your commercial clients with property insurance, to protect against risks like fire and loss, and general liability insurance, to protect against risks like personal injury, but are your offering adequate Employment Practices Liability Insurance (EPLI) coverage? Isn’t it your job as their insurance agent to make sure they are covered for the most important type of insurance they really need?

EPLI could be the most necessary type of insurance for your clients. A standard BOP or commercial insurance package is simply not equipped to handle the risks associated with litigation costs. Did you know that the average out-of-court settlement costs are an average of $70,000? Did you know that the median compensatory award is well over $250,000? (Source: Lexington Insurance Company/ADP)

In this overly litigious society that we live in, employment claims have more than doubled in the last decade, each year that number increasing with no end in sight. More than 50% of all EPLI charges are filed on small businesses (100 employees or less). Employment Claims represent more than 30% of all civil litigation in the U.S. Are your clients protected? How will they feel if they are involved in a lawsuit and knew nothing about their EPLI or that they had an opportunity to raise their limits?

Here is another staggering statistic. It is estimated that three out of five employers are sued by either potential, current, or former employees each year. (Source: Gaston & Associates, Inc.) Most of the claims come from the least expected places. Many claims are from current and former employees, but do your clients know that they are also put at risk by candidates for employment?

So what types of claims does an EPLI policy typically provide coverage for? EPLI policies often provide coverage for wrongful termination claims, discrimination claims, sexual harassment claims, whistleblower claims and much more.

To protect against these claims your clients with any size company must have EPLI. Even if they have just one employee, it is an essential part of their business plan. You would not be doing your job as their trusted insurance professional if you did not ensure they had an adequate EPLI policy in place.

July 25, 2011