EPLI Coverage Program Details
We are excited to announce a new risk management tool for employers, Employment Practice Liability Insurance (EPLI) coverage.
What is Employment Practices Liability Insurance?
EPLI covers businesses against claims by workers that feel their legal rights as employees of the company have been violated.
The number of lawsuits filed by employees against their employers has been rising. No company is immune to such lawsuits and we recognize that smaller companies now need this kind of protection.
EPLI provides protection against many kinds of employee lawsuits, including claims of:
- Sexual harassment
- Wrongful termination
- Breach of employment contract
- Negligent evaluation
- Failure to employ or promote
- Wrongful discipline
- Deprivation of career opportunity
- Wrongful infliction of emotional distress
- Mismanagement of employee benefit plans
EPLI does not generally provide protection from the following violations:
- Any issues related to National Labor Relations Board (“NLRB”) charges or violations
- Claims made relating wage & hour violations
You may request a sample policy document from our risk management department to review all policy details. A limited summary of policy terms is listed below.
As your PEO, AdvanStaff HR has access to insurance programs at vastly superior rates than most companies would have access to on their own. Based on our purchasing power and economies of scale for grouping together small businesses, our clients can qualify for programs not previously available. EPLI is one of these programs.
Opt-Out Deadline: June 22, 2020 Effective Date: July 1, 2020 Policy Period: One-year, renewing annually Claim Period: 1. No acts that occurred prior to the initial coverage period are covered. No pre-existing events are covered. 2. A current AdvanStaff Service Agreement is required for EPLI coverage. Any claims made after contract termination are not covered under the EPLI policy regardless of when the act occurred. The client worksite must purchase tail coverage for post contract event coverage. Aggregate Coverage: $ 2,000,000 across all participating companies Max Coverage/Claim: $ 1,000,000 Deductible per claim: $ 25,000 if reported within 30-days of claim (deductible options may be available) $ 50,000 if reported after 30-days of claim Enrollment: Automatic, however employers may decline coverage prior to the June 15 deadline. No action is required to participate. Cost: Will be determined based on individual risk factors, premiums levels range from $3 to $5 per employee per month and will be billed with payroll on a pay-as-you-go basis. Minimum Premium: Pay-as-you-go premium billing is for convenience and budgeting purposes only. If the AdvanStaff Service Agreement is cancelled mid EPLI policy year, the the premium for the years coverage is due. Final premium will be estimated as follows: the remaining number months in the policy year multiplied by the number of employees at the policy renewal anniversary date. Excluded States: Coverage under this policy is not available in California.
*AdvanStaff HR reserves the right to not offer coverage to all employers.
The cost of EPLI coverage depends on your type of business, the number of employees you have, the state in which you operate and various risk factors (such as whether your company has been sued over employment practices in the past.) The policy will reimburse your company against the costs of defending a lawsuit in court and for judgments and settlements (less the deductible.) The policy covers legal costs, whether your company wins or loses the suit. Policies also typically do not pay for punitive damages or civil or criminal fines. Liabilities covered by other insurance policies such as workers compensation are excluded from EPLI policies.
To prevent employee lawsuits, employers must educate managers and employees to minimize problems in the first place:
- Create effective hiring and screening programs to avoid discrimination in hiring.
- Post corporate policies throughout the workplace and place them in employee handbooks so policies are clear to everyone.
- Show employees what steps to take if they are the object of sexual harassment or discrimination by a supervisor. Make sure supervisors know where the company stands on what behaviors are not permissible.
- Document everything that occurs and the steps your company is taking to prevent and solve employee disputes.
Frequently Asked Questions:
How is premium collected?
Premium is collected on a Per Employee Per Month (PEPM) basis via the payroll invoice. PEPM premium is based on location, SIC code, employer experience or several other factors.
Are there any other deductible options?
- $25,000 deductible – Standard Pricing
- $15,000 deductible – Increase Standard Pricing by 10%
- $10,000 deductible – Increase Standard Pricing by 25%
Lower deductible options may not be available for all clients. This benefit is extended at AdvanStaff HRs risk departments discretion.
Why do I need coverage?
Employment related claims are on the rise. You hired AdvanStaff HR to manage risk and to provide risk management services and guidance. EPLI coverage is one of many affordable tools offered by AdvanStaff HR that protects the business from unforeseen and often uncontrollable situations and consequences of employee related behavior. As you know, there is no way to eliminate risk, but good practices and products proactively put in action will greatly reduce risk.
When a claim does happen, it is important that the enterprise survive defending the claim and is able to pay the penalties levied. We HIGHLY encourage all employers to participate in this coverage. All employers are financially and legally responsible for the behavior of their managers and staff. The cost of this coverage is very small relative to the benefit.
What are the advantages to the AdvanStaff HR EPLI program?
The EPLI program eliminates many layers of costs like expensive minimum premiums and costly policy fees. Premium per employee is low because the cost is spread out across all participating organizations, and there is real purchasing power in numbers. You can expect this coverage to be discounted as much at 30-80% compared to total policy costs of going alone. In addition, AdvanStaff HR handles all elements of policy administration and annual reporting requirements to the employer.
Can I decline coverage?
Yes. Even though we highly discourage declining coverage, participation is not mandatory.
Employers declining coverage will not be able to opt-in to coverage until the policy anniversary. At that time, AdvanStaff HR will underwrite and evaluate the risk associated with adding your company on to the policy and provide an offer for coverage at the appropriate premium level.
If you would like to decline coverage, simply send an email to firstname.lastname@example.org or use the form at the bottom of the page with instructions to decline coverage. Our risk manager will follow up with you directly.
Because this coverage is so affordable, we highly recommend all companies participate. However, some clients may choose to carry their own EPLI coverage. In that case, we fully understand.
Can I opt-out of coverage at any time?
As is customary with these types of policies, premium is almost always due upfront at the beginning of the policy year when coverage is bound. Thus, premium is due up front, which AdvanStaff HR manages.
Because this coverage is so important, we have extended a pay-as-you-go program which spreads the premium payments over may pay cycles. Even though we offer pay-as-you-go premium payment, the policy commitment is for the entire policy year.
The EPLI program through AdvanStaff HR is affordable, high-value, and no effort (other than to stay in compliance!) It is a turn-key solution from the worksite employers perspective as AdvanStaff HR does all the back office work.
Can AdvanStaff HR terminate this coverage?
Coverage is immediately terminated upon the client’s failure to fund payroll, pay premium, or if employer services are terminated by either party. AdvanStaff HR can also terminate coverage if the Employer fails to adhere to policies and guidance provided by our internal HR department.
Transferring coverage from a standalone client policy.
Employers with their own EPLI coverage who wish to transfer coverage to this program should ensure all existing or potential matters are closed as no coverage is provided for any claims reported or incurred before June 1, coverage on this policy is not retroactive. Please consult your insurance agent to determine if changing is advantageous to you and if purchasing tail coverage would be advisable.
When do policy terms change?
Premium or policy terms could change every policy anniversary year based on market conditions, total policy performance, or many other factors. The policy anniversary date is every June 1. As the master policy holder, AdvanStaff HR reserves all rights to manage all elements of the policy which include but are not limited to carriers, policy terms, premium levels, who may participate in the policy, etc. Material changes in coverage will be communicated to the Client with reasonable notice and will not be retroactive.
Is coverage retroactive?
This EPLI coverage does not cover any events, situations, or actions occurring prior to the effective EPLI coverage start date, regardless of when the actual claim was made. If Client has outstanding labor law issues, Client must keep current EPLI coverage in place until the pre-existing issues are resolved. This policy will not cover pre-existing matters.
Is this coverage available to all Advanstaff HR clients?
No. Not all employers are eligible. Offers for coverage are based on many risk factors and not all worksite are offered coverage.
Can I get a copy of the policy?
Yes. Please contact the AdvanStaff HR Risk Management Department for a sample copy of the EPLI policy.