Employment Practice Liability Insurance (EPLI) protects businesses against claims made by employees that their legal rights have been violated by the company.
EPLI deals with wrongful termination, sexual harassment, discrimination, invasion of privacy, false imprisonment, breach of employment contract, emotional distress, deprivation of career opportunity, mismanagement of employee benefit plans, and wage and hour law violations. It may be categorized as a form of professional liability. EPLI is offered as a type of management liability insurance, which is related to professional liability insurance.
Securing a policy will reimburse your company against the costs to defend a lawsuit in court and for judgments and settlements. The policy covers legal costs, whether your company wins or loses the suit. The policies, however, usually do not pay for punitive damages or civil or criminal fines.