What You Need To Know About EPLI Before Starting a Business

When it comes to starting a business, there is a lot of work cut out for the brave entrepreneur before operations even begin to get off the ground. Not only does starting a business include an incredible amount of hard work, commitment, and determination, but it also requires a good amount of research. 

For the entrepreneur, there is probably no other job that can quite compare to this kind of challenge and satisfaction. Yes, this job isn’t for everyone, but for the man or woman who wants to begin their company, very little else will actually suffice. One thing that a lot of entrepreneurs have in common is an unrelenting amount of passion for their business. 

While it’s important to understand your business concept, and more than that, to believe in it, there are also other aspects of beginning a business that need to be taken just as seriously. One of those aspects, that’s just as important as the purpose of the business or the finances to begin it, is insurance. 

When it comes to running a startup, it may be tempting to try and look for corners to cut. Often times this initial stage is represented by a lot of sleepless nights, hard work, and tight or limited budgets. So trying to find ways to work smarter and not harder is admirable and necessary, however, one area that is not advisable to ‘cut’ is that of insurance.

In fact, business insurance is one of the most fundamentally important aspects of a startup. Without proper business insurance in place, it can be scary to try and start a business. All of your hard work can quickly come under attack and unfortunately in the business world, lawsuits are common. For startup companies or smaller companies, the massive amount of legal fees that can be incurred can actually threaten their stability and even their future. 

Business insurance works to help protect the investments that men and women make into their startups so that if their hard work comes under fire, they can learn to form the experience, and not be destroyed by it. 

When it comes to the kinds of coverage that every startup needs to be aware of, EPLI coverage is one of the most important. This is especially true if your business will have employees during its early stages. If you have been curious about what EPLI insurance is and why it’s important, here is everything you need to know. 

What Exactly is EPLI?

EPLI stands for Employment Practice Liability Insurance, and it helps to provide businesses with coverage from possible lawsuits from their own employees. These lawsuits, or claims, are typically based on these key aspects of their experience with a company:

● Discrimination

● Wrongful termination

● Harassment 

● Failure to promote

● Wage and hour 

These claims can be made by any employee and are a matter of great significance to any company because they can represent significant damages. In 2018, over five million dollars was secured by the Equal Employment Opportunity Commission act for over 67,860 victims of discrimination. Not only is this something that the legal system takes very seriously, but it’s also something that all businesses that have employees run a risk of facing. 

What is Discrimination?

While there are more categories than just discrimination that an employee can claim against their employer, this is one of the most popular. There are several areas of discrimination that an employee can claim their employer wronged them in. The most common areas of discrimination are:

● Age

● National Origin

● Religion

● Gender

● Pregnancy

Issues of discrimination come down to claims of unfair treatment based on one of these, and more, areas. For example, an older employee can claim that they have been discriminated against in the workplace based on their age in a way that has limited their ability as an employee to perform or get rewards. 

Do You Actually Need EPLI Coverage?

This may be a hard question for people who are starting up a business to answer. The truth is, the cultural environment surrounding the legality of business makes this kind of coverage a necessity in today's society. The moment that an employee comes into contact with a company, liability should be in place. 

For most cases, it’s never a question of ‘if’ a business will face these kinds of claims, but ‘when’. While it is true that just because a claim is made, does not mean that it is true, the legal fees associated with the process can still be substantial. 


For any sized business, having coverage that protects your business from the financial fallout of employee-related claims is a necessity. This kind of coverage can give a company, at any stage of growth, the opportunity to learn from a negative experience with an employee, rather than be harmed permanently by it. 

This post is provided by a third party who may receive compensation from the products or services they mention.


More from The Daily

This Week's Digital Issue

Loading Recent Classifieds...