Employment Practices Liability Insurance (EPLI) and Workers' Compensation Insurance both protect businesses from employee-related risks. EPLI, an optional coverage, protects businesses against employee claims such as discrimination, harassment or wrongful termination. Workers' Compensation is mandatory and protects employees who suffer job-related injuries or illnesses, covering medical expenses and lost wages.
Employment Practices Liability Insurance (EPLI) is a type of coverage that helps you, as an employer, handle the financial fallouts related to employment practice issues. Your EPLI policy will protect you against claims from your employees who believe their legal rights have been violated.
When you buy an EPLI policy, your business is protected against several claims. Coverage typically includes but is not limited to:
The specifics of what is covered can vary, so you should review your policy carefully for exact coverage details.
These are examples of situations that EPLI will protect your business:
Workers' Compensation is a type of insurance that protects employees who get injured while at work.
Medical Expenses: all medical treatment related to the
Lost Wages: a portion of the employees wages will be paid during their recovery
Rehabilitation Costs: any physical therapy or retraining necessary for the employee to resume work
Death Benefits: Financial support for the dependents of a worker who has died from a work-related incident
Workers' Compensation insurance is usually required by each state’s law and compliance is not optional.
Coverage Requirements: Vary by state but generally require that all employees are covered
Penalties for Non-Compliance: Can include fines and legal
No Fault System: Benefits are provided without the need to prove your employer's negligence
Understanding the differences between Employment Practices Liability Insurance (EPLI) and Workers’ Compensation is crucial for effective business risk management. These differences include the scope of coverage, coverage limits, the process of policy acquisition, cost of the policies, and the claims handling procedures.
EPLI and Workers’ Compensation cover different things. EPLI focuses on the issues from your employment practices, whereas Workers’ Compensation will help when your employees when injuries occur on the job.
EPLI policies typically include coverage limits, which set a maximum amount the insurance company will pay for legal expenses, settlements, and judgments.
It’s important to understand what your limits are as the policy will only cover up to the limit and after that, the business will have to pay the rest.
In contrast, Workers' Compensation does not have limits. This is because Workers' Compensation is a legal requirement that is designed to protect an injured worker. Since there is no telling how badly they will be hurt, the policies are crafted to provide all necessary medical treatment and compensation for lost wages.
Employment Practices Liability Insurance (EPLI) is typically purchased as a standalone policy. To acquire EPLI, you would:
For Workers' Compensation, the steps generally include:
Remember, failing to have adequate coverage can result in out-of-pocket expenses far outweighing the cost of premiums.
The claims process for EPLI often requires a careful examination of the circumstances surrounding the alleged wrongful act. If an employee sues your business, EPLI may cover the associated costs after a deductible is met.
When it comes to Workers’ Compensation, an injured employee typically files a claim directly through workers’ comp channels without the need for a lawsuit. The system is designed to expedite the process and the employee usually doesn’t need to sue the employer for injuries covered by the policy.
Protect your employees and your business with a policy crafted to meet your unique needs.
Your business deserves the assurance of comprehensive coverage. Start your quote now to embrace a more secure tomorrow.
Note: The information provided in this blog is intended for general informational purposes only and is not a substitute for professional legal or insurance advice. Laws and regulations regarding workers' compensation insurance are complex and vary by state and by specific circumstances. Therefore, readers are encouraged to consult with a qualified legal or insurance professional to obtain advice with respect to any particular issue or problem they might have.
Mordechai Kamenetsky, co-founder and lead agent of Kickstand, is recognized as an expert in workers' compensation. He is passionate about helping small businesses manage risks and lower their workers' comp costs. In his articles, he educates readers and clients on the intricacies of workers' comp insurance.