When you run a business, you wear many hats. You’re the boss, the problem-solver, the cheerleader, and sometimes even the janitor. But one hat you might not think about often is the “risk manager.” Protecting your business from risks is a big part of keeping it thriving. One risk you can’t afford to ignore? Employment-related lawsuits. That’s where Employment Practices Liability Insurance (EPLI) comes in. But here’s the real question: Do you need standalone EPLI coverage, or is the protection in your general liability policy enough? Let’s break it down in simple terms so you can make the best decision for your business.
What Is Employment Practices Liability Insurance (EPLI)?
EPLI is a type of insurance that protects your business from claims made by employees. These claims can include things like:
- Wrongful termination
- Discrimination (based on race, gender, age, etc.)
- Sexual harassment
- Retaliation
- Workplace bullying
- Breach of employment contract
Even if your company has a great culture and treats staff well, anyone can file a claim. Even small businesses face employment-related lawsuits. And defending yourself can be expensive, time-consuming, and stressful. Getting a lawyer to help settle an employment claim before going to trial will cost employers around $75,000 on average. If the case ends up in court, getting ready for trial alone can easily cost over $125,000. EPLI helps cover legal fees, settlements, and judgments so your business doesn’t take a huge financial hit. A standalone EPLI policy can provide the protection you need to handle these risks.
What’s the Difference Between Standalone EPLI and Bundled Coverage?
There are two main ways to get EPLI coverage:
- Standalone EPLI: This is a separate policy specifically for employment practices liability. It’s designed to give you comprehensive protection for employment-related risks.
- Bundled EPLI: Some general liability or business owner’s policies (BOPs) include EPLI coverage as an add-on.
Both options have pros and cons, but the right choice depends on your business’s needs.
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Why Consider Standalone EPLI Coverage?
Standalone EPLI isn’t for everyone, but it’s worth considering if:
1. You Want Stronger Protection
Bundled EPLI might seem convenient, but it often comes with lower coverage limits and fewer protections. Also, remember that every insurance carrier offers different sub-limits for employment risks. Standalone EPLI, on the other hand, is designed to give you wider coverage tailored to employment risks. 
2. Your Business Is at Higher Risk
Sometimes bundled policies don’t include 3rd party coverage which can be critical depending on your business. Also, some businesses are more likely to face employment-related claims. For example:
- You have a large number of employees.
- You’ve had issues with employee complaints or turnover in the past.
- Your industry is highly regulated (like healthcare or finance).
If any of these apply to you, standalone EPLI is best.
3. You Want to Protect Your Reputation
Employment lawsuits don’t just cost money – they can damage your business’s reputation. Standalone EPLI often includes access to resources like HR consultants or legal experts who can help you resolve issues before they escalate.
4. You’re Growing Your Business
As your business grows, so do your risks. More employees mean more chances for misunderstandings, conflicts, or claims. Standalone EPLI can scale with your business, ensuring you’re always protected.
When Might Bundled EPLI Be Enough?
Standalone EPLI isn’t always necessary. Bundled coverage might be enough if:
1. Your Business Is Small
If you only have a handful of employees, your risk of facing an employment-related claim might be lower. Bundled EPLI could provide enough protection without the extra cost of a standalone policy.
2. You’re on a Tight Budget
Standalone EPLI can be more expensive than bundled coverage. If you’re on a budget, bundled EPLI might be a more affordable option.
3. You Already Have Strong HR Practices
If you have clear policies, regular training, and a great company culture, your risk of employment claims might be lower. In this case, bundled EPLI could be enough.
Real-Life Example: Why EPLI Matters
Let’s look at a real-life scenario. (Note: This is a fictional example, but it’s based on common situations.) Sarah runs a small marketing agency with 10 employees. She’s always prided herself on being a fair and supportive boss. But one day, an employee claims they were fired because of their age. Sarah knows the claim isn’t true—the employee was let go due to poor performance—but she still has to defend herself in court. Without EPLI, Sarah would have to pay for legal fees out of pocket. Even if she wins the case, the costs could cripple her business. But with EPLI, her insurance covers the legal expenses, allowing her to focus on running her agency. Now, imagine if Sarah had standalone EPLI. She might also have access to an HR hotline to help her handle the situation before it escalated to a lawsuit. That’s the power of standalone coverage. 
How to Decide If Standalone EPLI Is Right for You
Still not sure if standalone EPLI is worth it? Ask yourself these questions:
- How many employees do I have? The more employees, the higher your risk.
- Have I had employment-related issues in the past? If so, standalone EPLI might be a smart investment.
- What’s my budget? Can I afford the extra cost of standalone coverage?
- Do I want extra resources? Standalone EPLI often comes with added benefits like HR support.
- What’s my risk tolerance? Are you comfortable with some risk, or do you want maximum protection?
If you’re still unsure, talk to an insurance professional. They can help you weigh the pros and cons based on your specific situation.
Ready to Learn More?
Standalone EPLI is there to protect you when the unexpected happens. While it might not be necessary for every business, it’s worth considering if you want stronger protection, peace of mind, and resources to handle employment-related risks. At Provant Group, we want to help you navigate the complexities of business insurance. Whether you choose standalone EPLI or bundled coverage, the important thing is to make sure you’re protected. If you’re curious about EPLI or other ways to protect your business, reach out to us at Provant Group. We’ll help you find the right coverage so you can focus on running your business. Contact Provant Group today to get started!