Understanding Employment Practices Liability Insurance for Staffing Companies
- Wrongful failure to employ or promote
- Wrongful deprivation of a career opportunity
- Wrongful demotion or negligent evaluation
- Wrongful discipline
- Employment-related misrepresentation
- Employment-related libel, slander, humiliation, defamation or invasion of privacy
Importance of EPLFrom the moment an employer begins the pre-hiring process until the exit interview, they are vulnerable to an employment-related lawsuit. While many suits are groundless, defending against them is costly and time-consuming; employment law is complex and varies depending on jurisdiction. As costs for litigation and damage awards climb, experts predict that employment law will only become more complex. EPL insurance covers both the cost of defense and the resultant damages from an alleged covered claim.
EPL and the Staffing IndustryTemporary staffing agencies face unique employment-related exposures resulting from the placement of their employees in positions under the direction and control of their clients.Its important to confirm that any EPL policy in place for a temporary staffing agency includes temporary employees under the definition of employees covered by the policy. Because of the complex relationship between temporary employees, thestaffing agency and their client companies, typically, both the temporary staffing agency and the client company are sued jointly under employment-related lawsuits. As a temporary staffing agency, your contract with clients may require that your EPL policy defend or cover damages resulting from employment-related lawsuits made against them by your temporary employees. To cover this exposure, your EPL policy would need to be specifically endorsed or extended.
ABOUT THE AUTHOR