What is Employment Practices Liability?

Employment Practices liability is a type of insurance that covers wrongful acts arising from the employment process. It’s designed to protect the business / individual being accused of an “employment wrongful act” by covering legal costs and settlements. 

This coverage can be part of an extension on a Directors & Officers Liability Insurance policy, occassionally included on a specialty Professional Liability policy. Additionally, there is also the ability to purchase this coverage on a separate specific policy.

Common Claims Arising from Employment Practices Liability

The most frequent types of claims covered under such policies include

  • Wrongful termination
  • Discrimination
  • Sexual harassment
  • Retaliation

In addition, the policies cover claims from a variety of other types of inappropriate workplace conduct, including (but not limited to) employment-related:

  • Defamation
  • Invasion of privacy
  • Failure to promote
  • Deprivation of a career opportunity
  • Negligent evaluation.

The policies cover the employment wrongful acts of directors and officers, management personnel, and employees as insureds.

Note that this policy will not cover settlements to employees as to what would legally have been required under Employment Standards.

Other terms, conditions and exclusions vary based on the insurer.

To learn more about harassment, please visit, Is it Harassment? A Tool to Guide Employees.

For more information or a quote on Employment Practices Liability, please do not hesitate to “Collis”.

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