Along with the other aspects of management liability insurance, employment practices liability is an essential coverage for most businesses. This liability insurance covers claims against the business or a member of the business in regard to certain employment practices. 

Employment practices liability coverage helps businesses respond to allegations of: 

• Discrimination based on gender, race, sexual orientation, etc.

• Sexual harassment

• Wrongful firing or hiring

• Failure to promote

• Breach of employment contract

• Retaliation

These types of claims may come from current employees, former employees or potential employees. If an individual feels they have not been hired due to discrimination against their race, gender, etc., they may file a suit against the hiring manager. This type of claim would be covered under employment practices liability policy, whereas other liability policies would likely not cover these allegations. 

While it’s important that all employees receive proper training, both sensitivity training and basic training, it’s often impossible to avoid conflict between people. This is why insurance agencies should carry employment practices liability coverage in order to protect employees and the company. 

Unhappy agents can often reflect that unhappiness on the customer, which can drive away business. Ensure your insurance agency maintains a welcome, open environment. Be sure that all potential directors and officers undergo extensive background checks and training before hiring. 

Why Do Insurance Agencies Need Employment Practices Liability Insurance? 

Any business that employs workers should carry employment practices liability as part of their management liability protection. Claims happen frequently between disgruntled employees and their employers, and lawsuits can be unfortunately expensive. Employment practices liability helps cover the cost of such a lawsuit.