Employment Practices Liability

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Do Staffing Agencies Need EPLI?

employment practices liability

Traditionally, employment practices liability insurance has been used to protect businesses against employee claims of discrimination, harassment, wrongful termination and failure to promote. However, it is also becoming more common for staffing agencies to carry this type of policy. They can face increased exposure to claims when their employees are introduced it another workplace.

Todays updated employment standards can be challenging to interpret. Based on rulings by the National Labor Relations board, staffing agency employees can also be considered economically dependent on the contracting business. This may blur the lines between who the actual employer is. As a result, claims are becoming more complex. Agencies need to protect themselves in the event of a claim.

Protect Against Claims

According to a three-year study launched by the EECO, recruiting firms and other types of employment agencies have been liable for harassment and discrimination faced by individuals theyve placed at work sites. The focus has recently moved from worksite issues to the placement policies of the staffing agencies. EPLI coverage protects the business in the event the EEOC makes claims such as:

  • Discrimination
  • Emotional and mental distress
  • Sexual Harassment
  • Slander/libel
  • Privacy invasion
  • Wrongful termination

If employees or the EEOC file a claim stating discrimination, the costs for firms to defend themselves or pay settlements could devastate the business. If you don’t have employment practices liability, talk to an insurance professional today. They can help you determine what types of coverage meets your agency’s needs.

Staffing Companies and Employment Practices Liability

employment practices liability

In order to run a successful business, staffing agencies rely on their talented team of staff and temporary employees to showcase their expertise and dependability. But they are also quite aware that circumstances often develop where a job candidate or temp staffer may decide to sue the business over what they might perceive as unfair treatment, even going so far as to allege that the reason they weren’t offered, or were terminated from a position was due to a stance of a discriminatory nature.

For example, let’s say that a former employee makes claim that he or she was wrongfully terminated from their employment, and brings litigation against the staffing firm. Having employment practices liability insurance can help the staffing firm with defense costs as well as pay any court costs and settlements that often accompany this sort of accusation.

Why purchase employment liability insurance?

Obtaining employment practices liability insurance (EPLI) safeguards a business against the high costs associated with lawsuits as a result of charges of discrimination, harassment, wrongful termination, and other similar claims associated with unfair business practices.

A company would find it difficult to defend against any claim stating that they violated a person’s civil rights, or failed to provide a fair, acceptable environment for certain people to work in, without this coverage on hand. Temp staffing agencies often find they have a greater exposure since they, for the most part, do not have control & custody of their employees.

EPLI can cover your business when accused of anything from mismanaging employee benefits or wrongfully terminating employment, as well as claims that they wrongfully disciplined or demoted an employee, sexual harassment, damaging an employee’s reputation due to slander or libel, discrimination, based on age, gender, religion and race, or other such factors.

This also includes breaching an employment contract, invading an employee’s privacy, causing emotional or mental distress, or making negligent decisions related to hiring, promotions, or compensation.

If anyone in a management position violates legal protocols in the workplace, whether intentionally or not, the company could end up facing a lawsuit. Given that the nature of these claims often comes down to one person’s word against another, most companies would prefer to avoid being embroiled in a lawsuit, and purchasing employment practices liability insurance coverage is the right solution to what has become a very common workplace concern.

Infographic for Staffing Insurance

We’ve broken down common risks that the staffing industry might face and provided a staffing insurance solution to reduce that risk in this staffing insurance infographic.
Staffing Insurance