3 Ways California EPLI Can Protect Your Small Business

Nov 09, 2022

Business Insurance

EPLI California

A wrongful termination or discrimination lawsuit by an employee can bring any small business to its knees if doesn’t have the financial muscle or proper insurance coverage.  With California EPLI or employment practices liability insurance, you can easily cover the cost of such a lawsuit against your business, whether you’re at fault or not. Here’s what you need to know about EPLI.

Introduction to California Employment Practices Liability Insurance

EPLI is a type of insurance that protects employers against employment-related liability claims. It covers costs associated with employee lawsuits such as:

  • Retaliation
  • Harassment
  • Discrimination
  • Wrongful termination

Having California EPLI can provide financial protection for your business when facing these types of employee lawsuits.

Why Should You Purchase California EPLI?

The cost of a single-employee lawsuit against your company can be significant. To protect your business from financial loss when sued by an employee, California EPLI can cover the bulk of such costs, including:

  • Attorney fees
  • Judgments
  • Out-of-court settlement

EPLI can also help protect your company’s reputation by enabling you to defend yourself in court against employment malpractice claims. The policy isn’t legally required in California, but it can help prevent the loss of a business you’ve worked so hard to build.

3 Scenarios in Which California EPLI Can Protect Your Business

  • Wrongful Termination Case by a Former Employee

    Assume, for some reason, you fired an employee who later sues your company for their dismissal. The former employee alleges that you sacked them without warning after they went on vacation and fell ill. They also claim that you fired them because of your dislike for minorities. Fortunately, you have California EPLI for your small business, which covers your defense fees and settlement to the tune of $135,000.

  • Sexual Harassment Claim by a Job Applicant

    You own a California auto repair shop that has an ongoing recruitment drive. One of the job applicants sues your company, claiming that she was harassed by some of your senior employees when she came for her interview. The case is tried before a jury that decides that your company did nothing wrong. Although you’re determined innocent in the matter, you incur $80,000 in defense attorney fees, which your California EPLI covers promptly.

  • Discrimination and Harassment Claim by a Former Employee

    You receive a letter of resignation from one of your employees accusing two of your managers of sexual harassment and gender discrimination. You set up a team that includes company attorneys to thoroughly investigate the matter. Based on evidence found in inappropriate emails, workplace jokes, and more, you fire one of the accused managers. Since you had EPLI, the policy helps your company save $145,000 in legal fees, settlement, backdated pay, and accrued interest.

Reach Out to Knight Insurance for Your EPLI Coverage Needs

No small business wishes to face an employment malpractice-related lawsuit or claim. However, having California EPLI ensures that you don’t have to spend over $100,000 out of pocket defending your company or settling in the event of any such claim. Contact our experts at Knight Insurance Services today to get proper insurance protection for your company in California. We’ve been helping insure businesses for over 100 years and can help you find the right customized coverage for your budget.