Texas General Lines — Property and CasualtyCommercial LinesMedium
A small IT consulting firm has 15 employees. They are concerned about potential lawsuits from employees alleging wrongful termination, discrimination, or sexual harassment. Which type of liability policy is designed to cover these specific risks?
- AProfessional Liability (E&O)
- BEmployment Practices Liability (EPLI)
- CDirectors and Officers (D&O) Liability
- DCommercial General Liability (CGL)
Show answer & explanationAnswer & explanation
Correct answer: B. Employment Practices Liability (EPLI)
Employment Practices Liability Insurance (EPLI) is specifically designed to cover claims arising from employment-related issues such as wrongful termination, discrimination, sexual harassment, and other employment-related torts.
Why the other options are wrong
- A. Professional Liability covers errors or omissions in professional services, not employee lawsuits.
- C. D&O covers wrongful acts by directors and officers in their management capacity, not employment practices claims.
- D. CGL covers bodily injury, property damage, personal and advertising injury, not employment-related claims.
Employment Practices Liability Insurance (EPLI)
A type of liability insurance that covers employers against claims made by employees, former employees, or potential employees alleging wrongful termination, discrimination, harassment, and other employment-related issues.
- Covers claims from employees/ex-employees
- Includes wrongful termination, discrimination, harassment
- Protects employer from employment-related lawsuits
Memory trick: EPLI: Employees' Problems, Legal Insurance.