What is Employment Practices Liability Insurance?

Is Employment Practices Liability Insurance a Must?
Employment practices liability insurance (EPLI) is a form of errors and omission insurance and protects your business against employee claims of discrimination, which could be based on age, sex, disability, race, or other traits. EPLI also covers suits regarding harassment or wrongful termination. In fact, as its name implies, its key function is to provide coverage if your employment practices are called into question.

If you’re the owner of a small to midsize business, you may assume this coverage is for large corporations. But bear this in mind: Although large corporations have hefty teams of lawyers on retainer to handle any employee lawsuits, it’s actually small and/or new business owners who are most vulnerable to these suits. As soon as you hire your first employee, this coverage becomes crucial.

Can you afford EPLI? The real question may be, can you afford not to have it? Claims and awards continue to increase, and you are at risk from discrimination claims in the same way as you are at risk from other types of liability claims.

Plus, EPLI may be more affordable than you think.

Its cost is based on several factors. The top variables include the number of people you employ, your turnover rate, your established rules and employee practices, and whether you’ve had any suits filed against you in the past.

Regardless of size, EPLI should be part of any company’s risk management plan. Discuss EPLI policy options and costs with your insurance agent, who can help you select the coverage you need.


MARKETING
Steps to Success: Marketing Your Business on a Budget

Good news: You don’t need a huge marketing budget to promote your business. Why not? There are abundant opportunities to gain exposure through social media.

“Customer-ize” your marketing. Since social media is all about engagement, use social media platforms to learn about your customers, identify topics that matter to them, and engage with them rather than sell to them. Ask questions, solicit opinions, and find ways to strengthen connections. Get people talking about your product or service.

Platforms. Facebook, Twitter, Instagram, YouTube, and Pinterest are essential platforms. For these and others, there are many low-cost/no-cost ways to reach out. Here are some from an article on bootstrap marketing in The Balance:

  • Blog: Start your own blog and/or comment on other related blogs.
  • Vlog: Upload videos to a branded YouTube channel or embed video on your website and share on social channels.
  • Post a podcast, webinar, or tutorial workshop, or host a real-time Q&A session.
  • Use Meetup to organize networking events with potential customers and demo or distribute samples of your products.

Spotting trends. These approaches can help you spot trends. Focus on what people are searching for online; keyword research is an easy way to identify hot topics, and there are free tools, such as the Google Keyword Planner and Soovle, for this. Getting to know, understand, and communicate with your customers is probably the most powerful marketing technique you can use. Best of all, when you do this through social media, the only real expenditure is your time.


ENTREPRENEURS
Steps to Success: How to Build a Comprehensive Business Plan

“I have always thought that one man of tolerable abilities may work great changes, and accomplish great affairs among mankind, if he first forms a good plan, and, cutting off all amusements or other employments that would divert his attention, make the execution of that same plan his sole study and business.” Benjamin Franklin

There is no better way to thoroughly know and understand your business, your industry, and your market than to go through the process of researching and developing a business plan.

A good business plan outlines a vision for your company and demonstrates how you intend to realize that vision. It serves as a blueprint to guide you through start-up, establishment, and eventually, business growth. It will also help you secure loans and attract investors.

In a comprehensive business plan, you should include an executive summary, a mission statement, descriptions of products and/or services, a market review, detailed financial analyses, and a succinct description of the business’s short- and long-term goals.

Also necessary are in-depth data about your target market, sales and marketing strategies, cash flow projections, operational particulars, and growth milestones and other ways of measuring progress.

There are many tools available to help streamline the process, including templates, business planning tutorials, videos, and kits. Many of these are free and available online. But the prospect of writing a business plan can still be daunting for a would-be small-business owner.

That said, and in the spirit of Benjamin Franklin, writing a business plan is a critical step in establishing your business as a success. And over time, this essential, living document will be just what you need to guide your business decisions and keep your business on track.


INSURANCE
Business Insurance and Your Employee Handbook
It’s important to understand the crucial connection between your employee handbook and your insurance. In fact, you can think of your employee handbook as a fundamental part of your insurance coverage. Essentially, insurance is much of what the book represents, since one of the top priorities as you create your employee handbook should be to protect yourself against costly lawsuits.

Yes, you provide the handbook to deliver information to employees and help onboard them, but the information is provided to help you as well. You can include fun facts about the history of the business and contest records from company picnics, but don’t leave out the nitty-gritty information that is essential to your operations.

The handbook should clearly spell out expectations in all areas of employment, offering guidelines you can refer to if an employee accuses you of unfair treatment. If a situation escalates into a discrimination lawsuit, you have the handbook to fall back on as proof you fully disclosed your policies and properly handled the situation.

Without these disclosures and guidelines, employers put themselves at greater risk of costly lawsuits. To give your business the best protection, create a thorough handbook that covers all the bases. Be sure to include:

Equal opportunity statement: This assures employees that you do not discriminate with regards to gender, religion, disability, etc. Therefore, it helps cover your company’s liability on a host of fronts.

At-will statement: This statement informs employees that their employment with your company is voluntary and subject to termination at will, with or without cause, and with or without notice. This will help cover many situations that could otherwise escalate into lawsuits.

Hiring and firing: Provide the details of your hiring process as well as the process for firing an employee.

Discipline: Provide an outline for disciplinary action. What happens after a first offense, second, and so on? Clearly detail what steps will be taken to correct employee behavior and at what point you will terminate.

Job descriptions: Clearly describe the expectations of each position and the skills required to meet them.

Attendance policies: Specify expectations of attendance, including hours if appropriate. Note the action that will be taken if attendance does not meet these standards.

Complaints: Inform employees of the correct procedure to follow if they need to file a complaint against a fellow worker, a manager, or the company. Let employees know what they can expect as a response.

Open-door policy: Let employees know they can report harassment, violations, or other situations without fear of reprisal. Outline the proper procedures for these actions. Make sure employees know clearly what to do if they experience a situation such as sexual harassment in the workplace.

Zero tolerance policy: State in your handbook any zero tolerance policies. Such policies typically include discrimination, harassment, and substance abuse.

Be sure to include a definitive index, but don’t worry if your handbook becomes lengthy. A thorough handbook will protect your business more effectively against potential lawsuits. It will be well worth the extra pages.

Editor’s Note: These are guidelines only. Here are two of the many resources available to help you ensure your handbook covers what is necessary:  Need to Know What Goes into an Employee Handbook? and Top 10 Employee Handbook Updates

April 11th, 2018 by Lightship Insurance