EPLI covers businesses against claims by workers that their legal rights as employees of the company have been violated. Employment Practices Liability Insurance, also referred to as EPL or EPLI, is becoming more of a necessity for fitness facilities rather than simply a nice coverage to have. A standard EPL policy protects business owners from claims by employees for harassment, discrimination, failure to promote, wrongful termination, any ADA rules not abided by, and other employment related issues.  In addition, the policies cover claims from a variety of other types of inappropriate workplace conduct, including (but not limited to) employment-related: defamation, invasion of privacy, failure to promote, deprivation of a career opportunity, and negligent evaluation. So, if you have employees, you are at risk for an EPLI claim.

Trends in society have created an environment where EPLI coverage is more valuable than ever. Employment related claims are on the rise. In the wake of the #MeToo movement, people’s focus on sexual harassment has grown, especially in the workplace. “According to a report released by the Equal Employment Opportunity Commission (EEOC), harassment claims rose 13.6 percent from 2017 to 2018. A 2019 study by NAVEX Global found an 18 percent increase in employee-reported cases of sexual harassment from 2017 to 2018.”

Employment related claims can be extremely costly.

  • The average cost to settle a discrimination claim is $125,000

  • The median discrimination judgment against an employer is about $200,000

  • The average cost to settle an employee lawsuit out of court is $75,000 (including legal fees)

  • The average amount awarded to employees in jury trials is $217,000

Potential Exposures

  • Wrongful termination of employment

  • Retaliation

  • Sexual harassment

  • Other unlawful harassment

  • Discrimination based on gender, race, religion, or sexual orientation

  • Failure to comply with ADA regulations

  • Employment-related libel, slander, or defamation, humiliation, or invasion of privacy

  • Failure to employ, promote, or train

Possible Coverages Available

  • Wage & Hour Sub-limit*

  • 3rd Party Coverage*

  • Immigration Defense

  • Work Place Violence Sub-limit

  • Risk Management Team

  • Duty to Defend

  • Choice of Counsel

*We have seen that the fitness industry has had an increasing trend of claims in the wage & hour, immigration, and 3rd party categories.

Hour and wage defense is typically excluded on most polices. Claims by employees for lack of overtime pay, lack of breaks, lack of meals and minimum wage violations are examples of why this coverage are important. Policies that do offer this coverage usually offer only as a sub-limit. $100,000 is the most typical sub-limit available. Hour and wage employment issues are criminal offences, therefore carriers cannot offer settlements or damages. The coverage is solely to defend claims, which can be very costly not to mention daunting to try to do alone.  

Third party harassment is also a big consideration for fitness facility owners to consider. Title VII of the Civil Rights Act of 1964, requires an employer to prevent known sexual harassment created by other employees or customers, regardless of the status of the harasser. 

We would be happy to provide an EPLI quote for you! Please give us a call at 800-881-7130 to ask about EPLI coverage and protecting your business!

  1. http://insurancemarketsource.com/trending/harassment-claims-rise-in-the-wake-of-metoo-reportseeoc/utm_source=LinkedIn&utm_medium=Social&utm_campaign=Campaign&utm_term=NA~20190418&utm_content=SocialLink~B0016

  2. https://amtrustfinancial.com/blog/insurance-products/top-trends-employment-practices-liability-claims