EPLI insurance focuses more on the personnel behavior rather than physical events that may impact you

A lesser-known insurance protection that few understand.

Or worse yet, ignore.

Employment Practices Liability Insurance (aka: EPLI) is gaining ground as one of the more important pillars of a restaurant business owner’s insurance strategy.

Aside from basic insurance coverages necessary to start a business – particularly a restaurant – EPLI insurance focuses more on the personnel behavior rather than physical events that may impact you.

Basically, other insurance is built around fire, tornado, windstorm, slip and fall, food-borne illness, and equipment breakdown events. EPLI, on the other hand, aims at the protection of your business from the particular activities of you and your employees.

Your restaurant is growing. Business is good. Your covers are up, receipts are good, and the Yelp reviews are mostly on the positive side. The hours you spend at the place are eating you up, so it’s now time to hire a General Manager. Let them make the day-to-day decisions, do the scheduling for the employees, order the food products.

Suddenly, their best friend is now tending bar. An ex-girlfriend is one of the wait staff. A few contacts that were developed from Facebook postings are now working as bar backs, dishwashers, and even one was promised a position as sous chef if they promised to come to work on time and act as an assistant for a while.

You can see the scenarios developing here. These may be circumstantial, but they happen all the time in restaurants across the country, and the claims that develop from these situations – ask any restaurant owner – are real.

Enter EPLI. What exactly does this type of insurance cover? Let’s look at a few basics, and the underlying main aspect of the protection that you simply can’t do without.

EPLI focuses on the following: Activities of the employer (either you or your officers and managers) towards the employees. This could be in the form of sexual harassment, wrongful termination, invasion of privacy, discrimination, and/or related emotional distress.

Bear in mind that many of these types of situations are accusatory in nature, and are often difficult to prove. You are going about your business on a given day, and suddenly a letter from an attorney arrives. Your manager’s best friend behind the bar just didn’t turn out to be such a good idea. The bartender is fired after a heated exchange. Bartender goes home, watches some daytime TV, sees the commercial for a litigation attorney, and…you know what happens next.

Following this, a back-and-forth develops between parties as to who did what to whom. It happens. The best thing about EPLI coverage is that it covers the defense of these types of activities. Meaning, after you learn of the episode from your staff – or the disgruntled ex-employee – you simply report the claim to your agent.

EPLI coverages are like any other liability product offered by an insurance company. You can buy higher limits of coverage for additional premium. Limits as high as $1 million per “event” are not uncommon.

You can also often choose as to whether or not you would like the insurance company defense costs to be a part of this limit of coverage, or covered as a separate limit of dollar coverage on your EPLI insurance policy.

Media publications focusing on the industry report that EPLI claims typically follow the unemployment rate. In the economic downturn of 2008-2009, EPLI claims spiked by 13% nationwide. Keep this in mind as you watch the ebb and flow of available employees for your job postings.

The most frequently-cited offenses, as reported by the Equal Employment Opportunity Commission (EEOC), are retaliation, race discrimination, and gender discrimination.

So, if your restaurant is showing signs of growth, and this growth is reflected in the increased diversity of your employees, you will need to seriously consider this type of protection. It is relatively inexpensive compared to basic restaurant liability insurance, is not a time- and paperwork-consuming process, and is offered by several well-known insurance companies in the US.

As with other lesser-known insurance offerings in the industry, this type of insurance is best found from a professional who knows your industry, as well as the specific application of EPLI to your situation.

Protect your food service business with Commercial Property Insurance that’s customized to fit your unique needs. For a comprehensive review of your current coverage or to find out more about how Commercial Property insurance can help you protect your business, contact our experts today.