Employment practices liability insurance for nonprofit organizations

While directors and officers insurance (D&O) provides coverage for decisions that result in financial loss for your nonprofit, it does not protect against claims that an employee’s rights were violated. Employment practices liability insurance (EPLI) covers the cost of lawsuits over employment-related issues.

This policy offers coverage related to:

• Employee harassment or discrimination
• Wrongful discipline, demotion, or termination
• Alleged hostile work environment
• Unfair hiring practices

From community centers to churches, there’s always a chance that a manager in your organization could be accused of mistreating a staff member or volunteer. If one of your employees sues your nonprofit for alleged sexual harassment or discrimination, this policy can cover the resulting legal expenses.

Being terminated can bring up intense emotions, and sometimes workers may opt to take an employer to court if they feel it was unjust treatment. If a staff member accuses your nonprofit of wrongful discipline, demotion or termination, EPLI can safeguard your small business against legal costs, settlements, and judgments.

From a staffer suing a community center for failing to deal with a rude coworker to someone at your counseling center claiming an unpleasant work environment, this coverage helps nonprofits handle the high cost of attorney's fees, a settlement, or a court-ordered judgment.

There are several factors that an employer is prohibited from considering during the hiring process, such as race, religion, and gender. When an employee claims your nonprofit made a decision to hire or promote based on discriminatory information, employment practices liability insurance provides the funds to cover your defense and settle lawsuits quickly.

Small business owners often purchase EPLI along with directors and officers insurance, another type of management liability insurance. A management liability insurance bundle usually costs less than purchasing the policies separately. Speak with a licensed Insureon agent who specializes in nonprofit insurance policies to find out more.

Employment practices liability insurance offers protection for when an employee sues your organization over their rights, but it doesn’t provide coverage for other common risks. Owners of small nonprofits should also consider:

General liability insurance: This policy can pay for expenses related to client injury and property damage, along with accusations of slander.

Business owner's policy: A BOP bundles general liability insurance with commercial property insurance, often at a lower rate than if the policies were purchased separately.

Professional liability insurance: Also known as errors and omissions insurance, this policy can help cover legal expenses if a nonprofit is sued for unsatisfactory or negligent work.

Directors and officers insurance: D&O insurance protects board members and officers if they are sued for a decision they made on behalf of your nonprofit that led to financial loss.

Workers’ compensation insurance: Required in nearly every state for nonprofit organizations that have employees, workers’ comp can cover medical costs for work injuries.

Are you ready to safeguard your organization with employment practices liability insurance or another policy? Complete Insureon’s easy online application. Once you find the right policy, you can begin coverage in less than 24 hours.