Employment Practices Liability Insurance

Platinum Commercial and General Insurance is able to arrange, place and manage all your Employment Practices Liability Insurance requirements.

Employment Practices Liability Insurance protects both a company and its employees when they become legally liable to pay claims made by employees, contract workers, temporary workers or any applicant for employment.

An Employment Practices Liability insurance Policy is typically available to cover defence costs and specified damages if you are taken to court for certain employment related issues. It protects the insured business, its directors, officers, and employees against a broad range of employment-related claims such as:

• wrongful dismissal, discharge, or termination of employment
• breach of any oral or written employment contract or quasi-employment contract
• misrepresentation
• violation of employment discrimination laws (including workplace harassment)
• wrongful failure to employ or promote
• wrongful deprivation of a career opportunity
• negligent evaluation
• invasion of privacy
• defamation
• wrongful infliction of emotional distress.

Employment Practices Liability Insurance can be purchased separately or purchased as a extension to the Directors and Officers Liability Insurance policy or Professional Indemnity Insurance. It defends the employer from financial loss following an incident involving one or more staff.

Frequently Asked Questions

1. Why should employers consider this product?

Life for employers gets more difficult every day because of actions taken by employees against them for a variety of reasons. It is so simple to encounter alleged transgressions of principles established by law. These relate to alleged discrimination, unfair dismissal and sexual or workplace harassment.

In March 2004, the Human Rights and Equal Opportunity Commission (HREOC) in their 2004 National Survey press release noted that "28 per cent of adult Australians (41 per cent of Australian women and 14 per cent of men) stated that they have experienced sexual harassment, with two-thirds experiencing sexual harassment at the workplace."

As the labour force continues to decrease in size and becomes more highly educated and acutely aware of its rights, it is likely to be far more litigious. The result is likely to be a steady increase in employer-related type claims. An Employment Practices Liability policy can assist employers reduce the business stress and cost exposure associated with such claims.

2.  What protection will an Employment Practices Liability policy provide?

A policy indemnifies an insured for a specified variety of employment-related claims by paying certain loss that the insured is required to pay. An insured can include a corporation, proprietor of a business, trustee of a trust or a partnership.

A Employment Practices Liability policy defines 'Loss' to include the amount payable in respect of a claim against the insured, including damages, judgements, settlements, interests, costs, defence costs and any back-pay where reinstatement is ordered by a court. It does not include any payments which the insured is required to pay pursuant to an obligation, whether under contract of employment, statute, award or otherwise.

3.  How does an Employment Practices Liability policy differ from a standard Directors and Officers (D&O) policy?

A Employment Practices Liability policy indemnifies an insured; that is the directors and officers and the corporation or employer. A standard D&O policy only indemnifies claims brought against directors and officers personally while acting in their capacity as directors or officers. An EPL policy protects the entity as well.

4.  Is it possible to take out an Employment Practices Liability policy as part of a D&O policy?

Yes. It is possible to take out an Employment Practices Liability optional extension to a Professional Risks D&O policy. As part of the D&O policy, the Employment Practices Liability option indemnifies the corporation for any employment-related claims. There is a benefit to writing both policies together as often claims are brought both against the corporation and the alleged offending director or officer. Also, in joining both policies together, there is typically a saving on administration costs.

5.  What is a 'Claims Made' policy? How does it differ from an 'Occurrence' policy?

A 'Claims Made' policy requires all claims and any fact, situation or circumstance that might result in a claim, to be notified to the insurer within the period of insurance. The insured must not have had any prior knowledge of the fact, situation or circumstance before the period of insurance. In an 'Occurrence' based wording the circumstance must occur during the period of insurance whilst the notification of this event can occur at any time subsequently.