In Massachusetts, Employment Practices Liability (EPLI) insurance provides coverage for clients and directors and officers, against employee-initiated lawsuits including alleging wrongful acts in the employment process. Lawsuits which are covered may have been initiated by current, former, or prospective employees who believe their civil rights were violated, or were forced to work in a hostile work atmosphere. A Massachusetts EPLI policy provides coverage for full-time, part-time, seasonal, temporary, and volunteer employees.
Massachusetts Employment Practices Liability Insurance policies cover the following:
- Deprivation of career opportunities
- Infliction of emotional distress
- Invasion of privacy
- Sexual harassment
- Workplace discrimination
- Wrongful discipline or demotion
- Wrongful termination
*Criminal acts or intentional acts are not covered under an ELPI policy.
Claims-Made and Occurrence
EPLI can be either “claims-made” or “occurrence” based, but claim’s made is the most common.
Claims-made means the policy must be activated at the time the claim is made. In other words, coverage applies as long as both the alleged incident and the resulting claim happen during the period the policy is effective.
Occurrence, on the other hand, protects you from any covered incident that occurs during the policy period, regardless of when a claim is filed. So, an occurrence policy responds to claims that come in, even if they are filed after the policy has been canceled – just as long as the incident happened while the policy was effective.
The Insurance Information Institute (III), recommends that to prevent lawsuits against employees, it is important to educate managers about best practices in hiring, firing and other supervisory issues. Anti-discrimination and anti-harassment training for all staff can also help prevent problems.
This is not intended to be a full description of coverage – call us at 781-943-1555 to further discuss a Massachusetts EPLI policy or any other insurance policies.