Suit Yourself

Protect your company from employee lawsuits.
Magazine Contributor
1 min read

This story appears in the September 2007 issue of Entrepreneur. Subscribe »

You know employees can sue you for discrimination or sexual harassment, but did you know that they could also sue for negligent evaluation or deprivation of career opportunity?

You can make your legal minefield a little less treacherous with employment practices liability insurance, which typically pays for defending many types of employee lawsuits and for judgments and settlements (but not for punitive damages or civil or criminal fines). EPLI can be purchased alone or as an endorsement to your general business policy.

Even if you think you're doing a good job respecting employees' legal rights, this coverage is worth considering. But "EPLI should not be viewed as a panacea against employee lawsuits," says D. Allen Miller, managing director of HR consulting firm Business Advantage International Inc. EPLI "is intended to provide a safety net that mitigates risk for employers who have effective policies and practices ingrained in their company culture. Over time, EPLI does little to protect bad employers from bad management practices," Miller says.

Jacquelyn Lynnis a freelance business writer in Orlando, Florida.

More from Entrepreneur

Get heaping discounts to books you love delivered straight to your inbox. We’ll feature a different book each week and share exclusive deals you won’t find anywhere else.
Jumpstart Your Business. Entrepreneur Insider is your all-access pass to the skills, experts, and network you need to get your business off the ground—or take it to the next level.
Are you paying too much for business insurance? Do you have critical gaps in your coverage? Trust Entrepreneur to help you find out.

Latest on Entrepreneur