EPLI Coverage in NJ

What would you do if an employee made a legal claim against you?

Employee practices liability insurance (EPLI) coverage protects employers against claims made by employees.

What does EPLI insurance cover?

  • Discrimination (based on sex, race, gender, orientation, age, disability)
  • Wrongful termination
  • Harassment
  • Wrongful discipline
  • Negligent evaluation
  • Other employee issues (failure to promote, etc.)

Larger corporations are generally prepared for and can handle a lengthy litigation brought on by disgruntled employees. They generally have substantial EPLI coverage in place and are prepared to deal with almost any employment lawsuit.

However, new or small businesses are particularly vulnerable to such claims. Most small businesses do not have legal departments or even one lawyer on staff. They may not have an employee handbook with an outline of policies and procedures in regard to employee hiring, relocation, or termination.

When a company in Eatontown and Medford, New Jersey hires a new employee and there is no history of them, they run an immediate risk because of the unpredictability of the unknown factor, the new person. Even from the beginning of the interview process, if it’s not conducted properly, a person may have a claim of discrimination if he or she was not hired based on the way certain questions were asked.

Avoid Litigation

Once a person is an employee, there are ways to avoid needless litigation, outside of EPLI coverage:

  1. Follow careful hiring practices and screening programs to prevent discrimination in hiring.
  2. Document everything that happens and the steps the company is taking to resolve employee disputes.
  3. Let employees know the steps to take if they have been the object of sexual harassment on the job. Make sure all supervisors know policies and are trained to avoid any accusations.
  4. Post corporate policies throughout the workplace and put them in an employee handbook for each employee. Emails and paper copies of any policy changes should be sent to every employee when and if changes happen, always making sure appropriate notices are in place.
  5. Familiarize yourself with the Federal employment laws. To refresh your knowledge, visit the EEOC website.

Who needs EPLI?

If a small business in Eatontown and/or Medford, New Jersey has even one employee, Employee Practices Liability Insurance, or EPLI coverage, is needed for protection. This type of insurance can be added as an endorsement onto a current business owner’s policy. Employment claims may come months or years after an incident has occurred.


Your workplace should be somewhere that you and your employees are able to get the highest productivity possible with the least amount of worry. EPLI coverage extends beyond the end of the policy period for a claim that happened during the time the policy was covered. With employee practices liability insurance and employee education, you’ll be able to get work done and know your company and employees are in good standing.

Give us a call to learn more about EPLI coverage.

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