All companies, regardless of size, should look to their personnel policies as the first line of defense against both the number and severity of employment-related claims. EPLI coverage is another valuable tool in a comprehensive risk-management arsenal. EPLI policies are written on a claims-made basis. This simply means that covered claims must be reported to the insurance company while the policy is in effect, or within an extended period specifically described in the policy.
In addition, the event leading to the claim must have occurred either on or after a specific date – typically the date when the EPLI policy commenced. Some insurers offer extended retroactive dates or full protection for earlier claims, but you should be sure you understand these terms.
The cost of EPLI coverage will vary based on the type, size and risk profile of your business. The insurance company may also want to see your written personnel policies to help them determine the risk and cost of your EPLI policy.