Employment Practices Liability Insurance: Discrimination
Employment Practices Liability Insurance (EPLI) is an insurance policy that protects employers against claims arising from an insured’s injury-causing employment practices, such as discrimination, defamation, or sexual harassment.
Discrimination happens when there is unfair treatment on the basis of certain arbitrarily chosen conditions. Employment discrimination also exists when privilege is given to one particular group over another because of race, gender, age, nationality, religion, or disability. For instance, making membership in one or another of the above groups a hiring requirement.
Discrimination is one of the most common perils to result in employment-related claims and insurers see a wide range of allegations being made.
Here are some common employment discrimination allegations examples:
- Bias in interviewing and hiring;
- Same work for different pay;
- Not accommodating disability such as not providing accessible washroom facilities;
- Forbidding the wearing of religious symbols in the workplace;
- Parental leave policies that distinguish between genders; and
- Retrenchment based on age.
It is important to understand that Employment Practices Liability Insurance does not provide coverage for injury-causing employment practices themselves, but rather, for the financial loss incurred as a result of claims that arise from those injury-causing practices.
The financial loss may include defence costs, damages or settlement. The most frequent loss incurred is defence costs. Even if no injury-causing employment practice has actually happened, the cost of defending against an allegation can be significant. This alone provides ample reason for employers to purchase EPLI.
