April 20, 2020
How Is EPLI Underwritten?
Underwriters use a variety of metrics to determine what to charge for EPLI and the scope of coverage to offer.
- The number of people you employ.
- Whether you’ve had prior suits lodged against your company.
- The percentage of employee turnover.
- Whether you have established rules and practices in place, such as an employee handbook that clearly addresses sexual harassment.
- Whether you have procedures in place that allow employees to report harassment and other forms of discrimination, and to do so without fear of retaliation.
Depending on the size of your company, EPLI can be offered as an endorsement to a Businessowners policy (BOP) or a general liability policy. Also, a specific stand-alone policy can be written in conjunction with a BOP.
EPLI coverage is usually written on a claims-made basis. This means the incident resulting in the claim had to occur during the coverage period. Because employment claims often come months or even years after the alleged incident, your company might be vulnerable if your insurance coverage was dropped or if tail coverage (liability insurance that extends beyond the end of the policy period) wasn’t purchased.