Employment Practice Liability

Definition
Employment practice liability is a special form of insurance that is added to an existing commercial general liability (CGL) policy. The CGL covers injury to persons or property by unintentional acts. This business insurance excludes intentional acts. If your employee or volunteer worker makes an allegation against you it is said to be a deliberate act. By the same token, employment practice liability policy excludes unintentional injury to persons or property.

How much is paid out?
Claims are brought against you because of relations with your volunteers or employees. This is usually a smaller monetary amount going up to approximately $30,000. Where the costs climb is the lawyer's fees totaling up to five times that amount. The amount claimed can include punitive or exemplary damages.

Examples of claim situations
The claim made against you by one of your employees for your action(s) could be brought before the Canadian Human Rights Commission. Some of the actions could include, but not be limited to the wrongful termination of an individual's employment contract; negligent evaluation of an employee; employment-related defamation; wrongful discipline of an employee; harassing or discriminating of an employee or depriving the employee of a career opportunity.

The insurance answer
Often the employment practice liability can be bought as a package with Director & Officers Liability. If you have a large group of employees then the risk of having a claim is usually a concern. Even a smaller organization can have issues and the legal defense this coverage purchases will not only save you money on the court costs but also a signifcant lost-time exposure as you attend the courtroom.

Talk to your agent or broker about what type of coverage your organization could consider. Review the options and then choose what is best to handle your risk situation.