What EPLI Risks do Accountants Face?
Employment Practices Liability Insurance (EPLI) is coverage intended to protect businesses against three general areas of employment related issues; sexual harassment a hostile work environment claims, wrongful termination, and any type of discrimination (which can include discrimination based on sex, race, age, religion, nationality, family, disability and pay, etc.)
It’s clear to see why any and all employers should carry EPLI, even if they only have 1 or 2 employees. Accountants are no exception. In fact, the American Institute of CPAs (AICPA) recommends that EPLI be an integral part of any CPA firm’s insurance portfolio.
Sources form the AICPA say that in addition to helping safeguard a firm’s assets, an appropriate EPLI policy will offer risk management and educational services for employment practices. Some accountants worry about the cost of such coverage, however in recent years, the cost of EPLI coverage has actually dropped dramatically. When you consider that the average cost of defending an EPL claim is $50,000, plus lost time and damage to the firm’s reputation, the cost of obtaining an EPLI policy is not significant.
If your accountant client is still unsure if the cost is worth it, consider the following true scenario, offered by the AICPA.
Case Study: A partner in a small professional services firm in Chicago was accused of making sexual advances against a young female employee. The partner denied any sexual contact whatsoever; however despite this the jury sided with the plaintiff. As a result, the plaintiff was awarded a multi-million dollar judgment, which resulted in the partnership’s eventual bankruptcy.
Some accountants feel that their Professional Liability policies will be enough to protect them from the financial damage that could arise from an employee made claim. However, employee related claims are excluded under the definition of “professional services”, as they are not the recipient of those services.
At PL Risk, we understand how important it is to address the needs of employees, in order to mitigate loss that may result from an EPLI Claim. We invite you to take a look at each of our programs, and discover more about how we can help meet your clients’ needs. Please give us a call at (855) 403-5982.