How California EPLI Can Save Your Business: 3 Scenarios

Group of managers peaking to employee about California ELPIAs a commercial business owner, it’s important to know the exact insurance your California business needs. California offers myriad protections for employees, including laws related to workers’ compensation and unemployment insurance. Along with those, there are other laws that protect employees from wrongful termination or discrimination.

At BearStar Insurance Services, our California employment practices liability insurance shields employers against these employee claims. California EPLI helps cover the cost of employee lawsuits, whether you are found at fault or not. It also covers the costs of legal fees to defend these claims and any potential settlement damages awarded to an employee.

Large corporations often have substantial legal departments to deal with just about any employment lawsuit. But what happens if you own a small or new business, which lacks legal support or financial resources? Unfortunately, you’re left vulnerable, if you don’t have the right coverage.

California EPLI coverage can be vital to small businesses who may not have the financial resources to cover these costs on their own.

Defending your business against an employment practices claim can cost you time, money and emotional distress. We’ll help you better understand what EPLI is, why your commercial business needs it, and how it can save your business should you face any claims.

What is California Employment Practices Liability Insurance (EPLI)?

EPLI insurance is specialized insurance that protects against employment-related liability risks. It’s a type of insurance that California businesses should purchase to help financially protect themselves from employee lawsuits. These lawsuits can be related to wrongful termination, discrimination, harassment, retaliation, and more. While no one ever wants to face these types of lawsuits, they do happen, and the costs can be significant.

This is where EPLI comes in. California EPLI can help businesses by covering the costs of these lawsuits, including attorney fees, settlements, and judgments.

Why Do You Need California EPLI?

While California EPLI is not required by law, it can provide significant financial protection for commercial businesses if they are sued by an employee.

EPLI can also help businesses by protecting their reputation. If accused and you have to go to court, these lawsuits can damage a business’s reputation, even if the business is ultimately found to be not guilty. EPLI can help businesses protect their reputation by covering the costs of defending themselves in these lawsuits. You’ve put a lot of hard work into creating your California business, can you afford to lose it with a lawsuit?

Three Real-Life Examples of How California EPLI Saves Businesses

There are many situations in which California EPLI can save your business. Here are three businesses that benefited from having BearStar EPLI coverage.

Unlawful Termination Claim Costs Irvine Business $135,000

A former employee who had worked for an Irvine company for four years claimed that he was fired without warning after taking a vacation and getting sick. He also claimed that he was fired because the owner of the company didn’t like minorities. ELPI coverage through BearStar Insurance paid the $135,000 in front pay and defense fees to settle.

Sexual Harassment Claim Costs Aliso Viejo Auto Repair Shop $80,000

An applicant sued the owner-operator of an auto repair shop, alleging that while she was there, and after completing her application, she was harassed by the employees and managers. The matter was tried in front of a jury, who decided in favor of the California EPLI-insured auto repair shop through BearStar with all $80,000 in defense expenses covered.

Discrimination and Harassment Claim Almost Costs Costa Mesa Business $145,000

A social media specialist resigned from her employment claiming that she had been subjected to sexual harassment and gender discrimination by two managers. The Costa Mesa business performed a thorough investigation and terminated one of the two managers involved. The evidence collected included a long series of inappropriate emails, jokes, and comments in the workplace. By being fully covered through BearStar EPLI,
the Costa Mesa business ultimately saved $145,000 in back pay, a lump sum settlement, including interest accrued during the investigation, and legal fees. Thankfully, there were zero out-of-pocket costs for the BearStar client.

Need to Add Employment Practices Liability Insurance Coverage?

Leveraging over 100 years of experience, BearStar Insurance agents have a deep understanding of what California business owners need – and don’t need – when it comes to commercial insurance needs. We work with some of the best carriers in the industry to provide you with custom-fitted, comprehensive coverage at the best possible price. We value the relationships we build with our clients; fill out this form to get started with your bond application or call us today at 949-979-5251 to speak with your local agent.