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Business Sense

Are You Covered When an Employee Claims Harassment or Discrimination?

You probably never want to imagine a situation in which an employee, a former employee or an employment candidate sues your business for sexual harassment or discrimination (on the basis of, for example, age, sex, race or disability). Unfortunately, though, it does happen.

Sexual harassment has been in the news media spotlight a lot lately, following allegations of inappropriate behavior made against celebrities and public figures.

These days, hiring, firing and day-to-day employee management can be risky business. Responding to charges like these can cost thousands of dollars, even when allegations are found to be groundless. Many business owners may not realize—or may realize too late—that they have a gap in their insurance coverage.

Are You Covered?

You can help protect your business by adding Employment Practices Liability (EPL) coverage to your business insurance policy. Most standard EPL insurance policies offer a measure of protection against claims or lawsuits brought against your business by employees alleging wrongful acts (sexual harassment or discrimination) or wrongful termination. You can purchase and add the coverage to your business policy as an endorsement.

Businesses that routinely deal with the public may also want to consider adding third-party EPL coverage, for protection from claims or lawsuits alleging harassment or discrimination against nonemployees—typically customers, clients and vendors.

How to Help Prevent a Problem

In addition to checking on your insurance coverage, you also need do all you can to prevent claims in the first place. Businesses should have harassment and discrimination policies in place and conduct employee training routinely.

Let’s be honest: As a business owner, it can be difficult to know how to address sensitive topics like harassment and discrimination. When you’re with ERIE, you don’t have to go it alone. ERIE customers who purchase EPL coverage have special access to resources including:

  • Access to a Legal Advice Line, staffed by legal professionals who can help with employee/employer behavior-related issues or questions. (Use does not erode your limit of coverage.)
  • Online resources, including training modules, communication materials, sample forms and template documents such as an employee handbook.
  • Access to experienced EPL attorneys, well-versed in wrongful employment behavior charges.

Questions? Talk to your local Erie Insurance agent. As your go-to insurance pro, your ERIE agent can explain the benefits of the EPL insurance coverage and available resources, and get you a free quote.

Abby Badach Doyle and Carolyn Sennett contributed to this story.

Coverages, benefits, limits and deductibles will vary. Conditions, exclusions and limitations will apply. Refer to our disclaimer for more information. Talk to an ERIE agent for state specific policy information.

These days, hiring, firing and day-to-day employee management can be risky business. Find out which must-have endorsement to your insurance policy can help protect you. /blog/third-party-claim-epli Erie Insurance https://www.erieinsurance.com/-/media/images/erieinsurance/erieinsurancelogo.png

ERIE® insurance products and services are provided by one or more of the following insurers: Erie Insurance Exchange, Erie Insurance Company, Erie Insurance Property & Casualty Company, Flagship City Insurance Company and Erie Family Life Insurance Company (home offices: Erie, Pennsylvania) or Erie Insurance Company of New York (home office: Rochester, New York).  The companies within the Erie Insurance Group are not licensed to operate in all states. Refer to the company licensure and states of operation information.


The insurance products and rates, if applicable, described in this blog are in effect as of May 2021 and may be changed at any time. 


Insurance products are subject to terms, conditions and exclusions not described in this blog. The policy contains the specific details of the coverages, terms, conditions and exclusions. 


The insurance products and services described in this blog are not offered in all states.  ERIE life insurance and annuity products are not available in New York.  ERIE Medicare supplement products are not available in the District of Columbia, New York and Wisconsin.  ERIE long term care products are not available in the District of Columbia and New York. 


Eligibility will be determined at the time of application based upon applicable underwriting guidelines and rules in effect at that time.


Your ERIE agent can offer you practical guidance and answer questions you may have before you buy.