What it is
Employment practices liability (EPL) insurance covers claims and lawsuits related to harassment, discrimination, wrongful terminations, etc. EPL is not limited to claims just by employees, it usually includes some, if not full, coverage for volunteers and third-party claims as well as. This coverage is usually included as part of the nonprofit D&O liability.
Three Reasons Why Your Nonprofit Needs this Coverage
- You can’t know everything: Employment law is complicated and tricky. However, part of what you get with Employment Practices Liability is help with your employee handbook as well as access to legal help.
- People get mad: Even an alleged wrongdoing of discrimination or harassment, etc. can cause a lot of problems within your organization and you want to have a place to turn for immediate help to deal with these situations.
- Sexual harassment Claims on the rise: Even a mere suggestion of sexual harassment can ruin the reputation of your organization and if this happens you want to be able to respond quickly and with the best legal advice available.
This Could Happen to Your Nonprofit
Failure to Accommodate:
An employee with ongoing performance problems was eventually terminated but alleged he was not given an accommodation due to stress in his personal life. Unfortunately, the employee’s file was not well documented on the performance issues, and the nonprofit had not addressed the accommodation request. The employee was highly paid, and the matter was heavily litigated over a four-year period. Because of the potential for an unfavorable jury verdict, the claim was eventually mediated to a settlement of $350,000 after $230,000 in defense expense fees were incurred.
A volunteer center asked a volunteer to resign. She filed a discrimination suit claiming they asked her to leave due to her sex, race, and the fact that she was pregnant. The case went to court and the volunteer was awarded $65,000 however, the defense costs were in excess of $150,000.
An employee of a youth organization filed a retaliation suit after being fired. He alleged that he was fired for making a workers comp claim for a serious injury. The matter was mediated and the former employee received $33,000 in wages and the defense costs were $21,000.