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EPLI and BPLI: Say What Now?
By VICKY BROWN
Today, we’re going to talk about some little known insurance policies that might help you and your business: EPLI and BPLI – in English they’re known as Employment Practices Liability Insurance and it’s sister, Benefits Practices Liability Insurance. Now I know they sound alike, but they are different insurance animals that offer different protection.
Let’s start with Employment Practices Liability Insurance or EPLI. This type of insurance acts as a kind of shield against claims related to your employment practices. Which means, how you interact with your employees. Let’s say you’ve just let go of an employee who consistently underperformed. A few weeks later, you get a notice that they’re suing your company for wrongful termination, and claiming age discrimination. Your stomach drops, your palms get sweaty. You know you did everything by the book, but now you’re facing a potentially expensive legal battle.
Well, that’s where EPLI steps in. It’s designed to protect your business from a wide range of employment-related claims. Things such as allegations of discrimination based on age, race, gender, or other protected characteristics. It also covers claims of wrongful termination, sexual harassment, retaliation against employees who file complaints, and even failure to promote deserving employees.
So, in our scenario, EPLI would help cover the legal expenses of defending against the wrongful termination claim. And if the case goes to court and you lose (banish the thought), it would also help cover the settlement and legal fees. Without EPLI, these costs could seriously impact your business’s bottom line.
Now, here’s a really important call out – EPLI does not usually cover what we call ‘wage and hour’ claims. Those are things like not paying overtime, or paying under the minimum wage, or not providing meal and rest breaks. It’s important to remember that unless you have specifically requested this type of coverage, they will not be covered under EPLI. And if you do get them added to your EPLI policy, well, that will significantly increase the cost of the coverage. So take all that under advisement when you’re talking to your broker.
“..many business owners assume their general liability insurance or business owner’s policy covers employment-related issues. But …those policies typically exclude such claims.“
Alright – now, let’s shift gears and talk about Benefits Practices Liability Insurance (also known as BPLI). While EPLI casts a wide net over employment issues, BPLI focuses specifically on your employee benefits program. It’s for claims related to the administration of benefits.
Here’s a situation where BPLI would be matter: Let’s say your office manager has been swamped with work and accidentally misses enrolling a new employee in the company health insurance plan. A few months later, that employee has a medical emergency and discovers they’re not covered. They’re now facing significant medical bills they can’t afford. Upset and stressed, they decide to sue your company for the error in benefits administration.
BPLI would step in to handle this situation. It covers errors in administering benefits, misrepresentation of benefits to employees, failure to enroll eligible employees in benefit programs, and similar issues. In our example, BPLI would help cover the legal costs of the lawsuit and potentially the employee’s medical bills if you’re found at fault.
Now again, the key difference between EPLI and BPLI is their focus. EPLI is your general employment practices safety net, while BPLI specifically deals with benefits administration.
Now, you might be wondering why you need these types of insurance. After all, you’re a good employer who treats your staff fairly. Unfortunately, in today’s business world, that may not be enough.
And keep in mind – EPLI and BPLI fill important gaps in your insurance coverage. I know that many business owners assume their general liability insurance or business owner’s policy covers employment-related issues. But you might be surprised to know that those policies typically exclude such claims, leaving a significant vulnerability in your risk management strategy.
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When you’re considering EPLI or BPLI for your business, it’s important to work with an insurance professional who understands your specific industry and your business model. The coverage you need can vary based on all sorts of factors like the size of your workforce, your industry’s specific risks, the complexity of your benefits programs, your company’s claims history, and the state and local employment laws in your area.
That’s where your insurance agent can help you assess all factors and find a policy that provides the right level of protection without unnecessary costs. They can also help you understand the specifics of what is and isn’t covered under each policy, ensuring you have comprehensive protection.
Remember, building a successful business involves more than just growing revenue and expanding market share. You also need to protect what you’ve built. EPLI and BPLI can help you do that. So reach out to your insurance broker, have a discussion, and figure out if either of these make sense for your business.
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