EPLI Insurance Critical To Combat COVID And Emerging Risks

Small Businesses

COVID-related lawsuits are coming for small businesses

The COVID-19 virus has been around for over a year now, but no one expected its impact on small businesses. Those businesses that made it through this far have yet to see some of the longer-term effects. It also seems like every day, there are new EPLI lawsuits related to someone fired from their job due to CoVid-19.  Maybe they contracted the virus and were unable to work, or because they were immunocompromised and refused to come to work. Or perhaps their employer failed to provide what they thought was a safe working environment. 

The idea of being a small business owner and trying to keep your business running, people employed, and everyone safe during a pandemic is nothing anyone planned. These COVID-related liability risks are why EPLI (Employment Practices Liability Insurance) is now a must-have for any business. 

COVID safe working environment and related questionnaires, temperature checks, PPE, and tests 

Since the start of the pandemic, the way businesses operate has changed. Sure, many of us have figured out how to work remotely, and curbside pickup or delivery is now more commonplace for almost anything. But inside a business, many now require a health questionnaire, temperature checks, and in some cases, COVID tests to continue to do their job. Before 2020, this would have been considered a medical examination and a violation of an employee’s

Temperature checks for employees with businesses more reason to have EPLI

privacy. According to the EEOC and the CDC, these new protocols are now necessary to prevent the spread of CoVid-19. 

Did you know that as an employer, if you cannot provide proper PPE equipment to your staff, you are potentially liable if an employee no longer feels safe coming into work so refuses to do so and is let go because of this?  

Creating a safe working environment can be a lot to think about when running a business, even without a pandemic. But having EPLI is an added coverage that goes beyond your business owners or commercial package policy that is well worth it. So, what are the benefits of having this additional coverage as a small business owner? 

The average EPLI case can cost you big $$$ no matter what size of business you own

In 2020, the EEOC recovered over $535 million in payouts for discrimination and wrongful termination employment practices suits against private businesses. The average out-of-court settlement was $40,000. But lengthy litigation can quickly drive that cost up to an average of over $325,000.

40% of all claims filed with the EEOC were against businesses with fewer than 100 employees. Every business is at risk of a claim. The defense costs alone could quickly put a small business into bankruptcy. The cost of an EPLI policy is pennies compared to the cost of litigation. Not to mention the peace of mind it can provide you to run your business without worry.

EPLI covers not only actual acts but alleged acts of discrimination, retaliation, harassment, wrongful termination, and other similar employment practices actions. 

Small Businesses now have more reason to purchase EPLI amid rising CoVid-19 litigation risks

As a small business, you want the proper coverage and legal protection against allegations of improper employment practices. Without EPLI, claims can add up to hefty legal bills for something that “may or may not” have happened. 

Many small businesses during CoVid-19, made hard decisions with their employees. Wage cuts, terminations, and failure to promote can all be considered discrimination or wrongful acts and can put you at risk for a potential employment practices claim.


Age, race & gender discrimination and retaliation claims are rising.

As a small business, we all know that hiring and retaining good employees is always challenging. But today, we must be more vigilant than ever to protect the company. There are more “baby boomers” in the workforce than ever before. Add on top of that a vast social movement with Black Lives Matter, #MeToo, and LGBTQ and transgender communities. Businesses are making more efforts to be more inclusive and making more conscious efforts to have a diverse workforce. No matter your choice for hiring or not hiring a particular employee, you could still be liable. Add to that any health issues or concerns that an interviewee with CoVid-19 creates another fear that small businesses could potentially discriminate against a potential hire. 

A potential rise in Religious and Health Discrimination Claims Amid the new CoVid-19 Vaccine.

If you are a small business that is public-facing such as a hair salon, could you require employees to vaccinate? No. Not at this point. Until there is a state or federal mandate, you

cannot require an employee to vaccinate. Your responsibility is to provide a safe working environment.

However, what if the other employees or your patrons feel more comfortable if everyone is vaccinated? If one of your employees has a health condition or religious belief that would prohibit them from being vaccinated, are they still able to do their job? Do your other employees feel safe with an unvaccinated employee? All of these questions can lead a business down a slippery slope. The potential for these types of EPLI claims is even more reason all businesses should have an EPLI Insurance policy.

Your current business policy probably doesn’t cover you for EPLI.

Your current commercial liability or business policy most likely does not cover EPLI claims. Many commercial umbrella policies “follow form” on the underlying commercial liability and therefore would not provide any coverage.

What else can you do as a business owner to protect yourself from potential employment practice claims?


You can prevent most employment practice claims with proper documentation. If you don’t have an employee handbook or a policy and procedures manual, this is a great place to start. You can find templates online, but you should have an attorney look them over once you customize them to your company. 

If you are a small business, chances are you do not have a human resources department. Having a written hiring and termination process can help when it comes to potential claims. 

Write out job descriptions from the expectation, minimum requirements, etc.

Documenting hiring practices and employee activity helps to prevent future EPLI claims against businesses.

Check out the EEOC’s new ADA guidelines post-pandemic to make sure you cover your basis for what you can or cannot ask and require a potential hire or employee during CoVid-19. 

In the end, as a business owner, you could do everything right from the hiring, onboarding, training, and termination, but sometimes cannot escape litigation.

Having an EPLI policy in place in addition to your small business policy can help avoid some of the cost of litigation and provide you with legal advice that can help put your mind at ease.

Given the rise in the cost and the number of EPLI claims, having this type of policy for small businesses is necessary. If you are interested in receiving a quote, please complete the Get A Quote form, and a representative will be in touch.

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