What is EPLI and Why is FedEx Requiring I have It?

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With the Employment Related Practices Liability Insurance (EPL) mandate deadline passed and the scramble to get compliant over, I figured now would be good time to explain what you just purchased for your company. Below is a brief coverage description, common claims scenarios, and finally the added benefits of the coverage:

Coverage Explanation

EPL Insurance protects against losses sustained because of an Employment Practices Wrongful Act (alleged or otherwise) OR from liability arising out of a Third-Party Wrongful Act (assuming Coverage B has been selected).

Whenever I ask a client if they know what the coverage protects against, the most common answer is "discrimination and sexual harassment”.  That is not an incorrect answer, just very incomplete.  EPL protects against the following Wrongful Acts:

Employment Practices Wrongful Acts

1. Wrongful termination
2. Sexual harassment
3. Employment discrimination
4. Retaliation
5. Breach of employment contract (Wage & Hour Disputes included when coverage is selected)
6. Violation of Age Discrimination in Employment, Family and Medical Leave Act, and Equal Pay Act
7. Violation of Uniformed Services Employment and Reemployment Rights Act

Third Party Wrongful Acts

1. Discrimination against a Third Party
2. Sexual harassment against a Third Party

It is common for many FXG clients to dismiss this coverage as just another insurance requirement from FXG. While, I certainly disagree with FXG’s handling of the EPL mandate, I truly believe this coverage is a welcome addition to your insurance program. EPL claims are more prevalent than you might anticipate and are on the rise in this industry.

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Common Claims Scenarios for FXG Contractors - Katherine's Take

Many of you have had one or more employment issues occur, and nothing came of it – likely settled by you, the contractor. But the ramifications of the occurrence could be great. In the words of my former terminal manager – “You got lucky”. If you don’t have a solid plan in place, many times, we contractors do get lucky in running our businesses. We forget about the “what if” and focus on the bottom line. But what if the bottom line is completely blown out of the water by a “what if” scenario?  Employment practices liability insurance covers you for those unlucky instances.

An encounter between an employee and a customer at a front desk could turn from simple flirting to a sexual harassment claim. A disgruntled employee claiming to need payment for back wages and your paperwork is less than stellar could lead to a wage and hour claim. A fight that breaks out between employees or a package handler could result in a workplace violence claim. An innocent box being thrown that hits a nearby FedEx worker could result in a claim. Not everything can be controlled in your business. Enter EPLI insurance.

Added Benefits

I am an advocate for the appropriate coverage, first and foremost. Check with your agent to verify the coverage form, limits, and retentions to be appropriate for your business.  However, from there, most EPL insurance companies offer added benefits like HR Help and/or access to free or discounted employment legal advice. These perks are truly a great benefit for the FXG contractor. If you are purchasing the coverage through Grove & Davis Last Mile, your coverage is likely with The Hartford Insurance Company. They offer:

1. Hartford HR Help Desk- this web portal allows free access to employment policy documents, employee handbook templates, state-specific employment notices, HR whitepapers, and more.
2. JacksonLewis HR Hotline: this is a free hotline you can call to get basic legal advice regarding HR/employment law questions. You also have access to their entire legal services at a discounted rate.

Use these services! Your best defense against an EPL claim is a solid employee handbook, appropriate HR procedures, and an up-to-date knowledge of employment statutes in your state.

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Questions? Contact Us:

Jason Grove: jgrove@grovedavisins.com

Katherine Portner: kportner@grovedavisins.com

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