Understanding EPLI

Welcome to America where anyone can sue anyone for anything. And why not? We are the only country in the world  where lawyers are allowed to take cases on a contingency basis (the attorney only gets paid if the lawsuit is successful). We are also the only country where if you lose your lawsuit, the loser most of the time does not have to pay the legal costs that you incurred to successfully defend yourself.

There is an excellent product that I recommend for all of my clients called EPLI – the acronym for  employment practices liability insurance. The annual premium cost for a policy with protection of $250,000 is usually under $1000. This policy covers the cost of a legal defense and a judgment against. Remember-if you get sued by an employee for something like harassment, discrimination, or unlawful firing-and if you lose-the judgment you will have to pay is NOT  covered by your malpractice insurance. And even if there is absolutely no validity to the claim against you, you have to take the necessary steps to defend yourself-and the costs of litigation are very significant. It would not be unusual to have to fork over 20 to 25 K as a retainer for a defense attorney.

With EPLI  at least you don’t have that worry. As I mentioned in my most recent blog post a well written office policy manual will serve as a deterrent for a large majority of potential lawsuits.  But EPLI provides that extra level of security and comfort. Please check with your insurance agent, and be sure to get coverage immediately.