EPLI Insurance in Vermont

What is EPLI insurance?

Vermont businesses that hire employees assume some risks when they do so. Should an employee ever claim they were discriminated against or harassed, a costly lawsuit could follow. EPLI insurance may help protect against such lawsuits.

EPLI insurance generally provides specialized liability protections against employee claims of workplace discrimination or harassment. Policies may pay legal fees and settlements for covered lawsuits.

When should Vermont businesses get employment practices liability insurance?

Employment practices liability insurance can be helpful whenever employees are hired. This is something that most Vermont businesses employing workers should consider. In some cases, businesses might even want it if they primarily work with independent contractors.

It takes just one employee, job applicant, or contractor to allege discrimination. Thus, coverage is broadly recommended regardless of how many employees or contractors a business hires.

What situations are covered under employment practices liability insurance?

Employment practices liability insurance policies might protect against a range of discrimination and harassment allegations. For example, a policy might offer protection in situations like the following:

• Women being paid less than men with equal qualifications and responsibilities
• Interns not being paid when doing an internship that should be paid
• Other types of unfair wage practices
• Older employees being fired or forced to resign because of their age
• LGBTQ+ employees being denied advancement opportunities they’re qualified for
• Minority employees being assigned menial duties that are below their role
• Interviewees being assed prohibited questions about immigration or pregnancy
• Job applicants not being informed that background checks will be run
• Some employees generally creating a hostile work environment

Exactly what a specific policy will cover depends on that policy’s terms, coverages, and conditions. An insurance agent who specializes in EPLI can review a chosen policy’s terms and coverages.

Do EPLI policies extend coverage to lawsuits filed by volunteers?

Not all EPLI policies are intended to cover allegations made by volunteers, but some might be able to cover such lawsuits. 

This is a particularly important feature for nonprofit organizations that rely on volunteers to look for. Despite being unpaid, a volunteer could allege that they were denied opportunities or harassed much like employees might in the above scenarios.

Nonprofits can work with a knowledgeable insurance agent, who can check which policies would likely cover volunteer-made allegations.

Do EPLI policies extend coverage to lawsuits filed by third parties?

Similarly, not all EPLI policies cover third-party allegations but some might. 

The most obvious potential third-party allegation is one that’s filed by an independent contractor, who may claim they were unfairly paid less, denied opportunities, or harassed. In rare situations, customers or vendors might also claim they were discriminated against in some way. 

A knowledgeable agent who’s well-versed in EPLI can also review terms to see whether a policy would cover third-party allegations.

Are discrimination and harassment claims covered under workers compensation?

Workers compensation normally covers claims where employees are injured or become ill due to their job. It typically doesn’t cover employment discrimination or harassment. For those potential issues, EPLI is normally needed.

What does a “retroactive date” in an EPLI policy mean?

Employees don’t always file employment allegations immediately when something occurs. They frequently file claims and lawsuits after the fact, which means employers may need retroactive coverage.

A “retroactive date” normally is the earliest date that something could have occurred and still be covered by the policy. Situations that occurred after the retroactive date might be covered. Anything that happened before it is unlikely to be covered.