Four Reasons Why Every Small Business Needs EPLI Coverage In 2018

Most small business owners do not understand why they need EPLI coverage in 2018. EPLI stands for employment practices liability insurance. It protects your company from potential employee lawsuits. In today’s work environment, your company is more likely to be sued by an employee than be damaged in a natural disaster. Indeed, employee lawsuits have become one of the most common disasters for small business owners in the United States.

Understanding EPLI Coverage in 2018

epli coverage in 2018

EPLI Coverage in 2018

As a professional employer organization (PEO), Total HR Management has tailored service offerings that include EPLI insurance. Beyond a standard business owner’s policy, an EPLI policy is the additional armor that small businesses need to protect themselves in the 21st century.

EPLI can cover legal defense costs in the event of an employee lawsuit. If you need to pay an employee settlement, EPLI can ensure that such a negative judgment does not bankrupt your business.

If you are still unsure about whether you need EPLI coverage in 2018 as a small business owner, let us highlight four reasons why every small business owner should have such protection:

First Reason – More Employee Lawsuits in the 21st Century

American employees are quicker to file lawsuits today than they ever have been in the past. Even if this trend is seen by many labor experts as a natural step toward better checks and balances, it is still a threat to your company. For business owners, the rising number of employee lawsuits means that EPLI coverage in 2018 is a necessity for your business.

In 2016 alone, 91,503 charges of workplace discrimination were filed with the EEOC. This is a major increase over the number of lawsuits filed the year before. In total, 2016 cases resulted in penalties and awards that totaled to more than $480 million in damages. Do you want your company to be a casualty of such financial devastation?

Second Reason – Small Businesses Targeted by Employees.

Most small business owners believe that employee lawsuits are almost always aimed at major corporations with deep pockets. However, in practice, nothing could be further from the truth.  More than four in ten employment lawsuits (41 percent) are filed against companies with fewer than 100 employees. Moreover, small and medium-sized companies in the United States (under 500 employees) have an almost 12% chance of facing an employment lawsuit claim in any given year.

Third Reason – Owners Liable for the Actions of Managers.

Most business owners succeed because they know how to run a company well and connect with their employees. However, are your managers and executives as good as you are when it comes to working with employees? Many state laws hold business owners liable for discriminatory behavior committed by managers. If an employee can prove their case against one of your managers, then you automatically become liable as well. Such an outcome is an employee lawsuit nightmare for most business owners. In such cases, EPLI coverage in 2018 can protect your company.

Fourth Reason – Employee Lawsuits Cost a Lot of Money

Employee lawsuits are expensive, regardless of the outcome. The New York Times has told the tough story of a California business owner who was sued not once or twice, but three times by employees that were claiming a variety of problems in the workplace. Each case was defended and proven to be spurious. Still, the cost of defending and settling a claim, either in court or out of court, can be anywhere from the low five figures to the high six figures and beyond. Trial cases tend to cost twice as much as settlements, even if the case is thrown out of court. As a result, EPLI coverage in 2018 is a necessity.

Total HR Management Can Help

To learn more about EPLI coverage options from Total HR Management, take the first step today. Please call (800) 975-5128 to learn more about how we can help you protect your company moving forward.


No Legal Advice Intended: This blog includes information about legal issues and legal questions. Such materials are for informational purposes only and may not reflect the most current legal developments. These informational materials are not intended, and should not be taken, as legal advice on any particular set of facts or circumstances. You must not rely on the information on this website as an alternative to legal advice from your attorney or another professional legal services provider.


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