Employer Insurance: EPLI versus EBLI

Every employer knows they must be prepared in the event they are sued. But what type of insurance do they need? Among all the types of insurance out there, two of the most important and necessary types are Employee Benefits Liability Insurance and Employment Practices Liability Insurance. These types of insurance keep a company going if they are struck with expensive lawsuits.

Many times, employers are sued out of the blue. Employees may not know exactly what their benefits are. They may start out with a good time on the job and then have things spiral as time goes on. In these cases, when they feel they have been wronged, a lawsuit can appear to come out of nowhere. Employers need a specific insurance to cover thin gs like wrongful termination lawsuits, even if they are in the right.

The legal expenses can add up to defend a company in any case. Whether they are innocent or liable, the defense costs can start in the thousands. Having EPLI and EBLI in the proper amounts makes everyone properly covered. This depends on the industry and number of employees.

Many employees have benefits. If a company offers benefits to its employees, EBLI will cover liabilities stemming from administrative errors as they occur during the dispersal of those benefits. Some less-than-common errors include failing to keep up with the beneficiaries of the plan as they are to be registered (such as arriving children) or failing to properly describe benefits coverage to an employee.

Employee benefits liability insurance is a “claims-made” insurance. The claim is considered covered when the employer is liable. Often, employee benefits liability insurance is available as an add-on to a commercial general liability insurance policy.

Employee practices encompass a lot of things when it comes to the employer’s side of the business. Hire and termination, anti-discrimination practices, evaluation, implementation of the Family and Medical Leave Act, and promotion are a few of the employee-related actions businesses take every day.

Getting started in business without EPLI is easier than it is to stay in business when something goes wrong. Many well-meaning employers think that they will never need employee practices liability insurance because they consider themselves competent. Accidents can happen to the best business owners, and items covered under employee practices liability insurance can be very expensive.

There are also days that businesses simply need to defend themselves in court. Having EPLI and EBLI insurance available when the need arises is an important part of keeping business costs down.

Running a business means keeping many moving parts in good working order, and employee practices and benefits are some of the most complex parts of running a business. EBLI and EPLI will help keep things together and employee relations better should something go amiss in the workplace. As with any type of  insurance, it’s best for companies to buy the most policy they can afford and leave nothing to chance.