Ready to hire? It might be time for an EPLI policy.
I sat down with my good friend Tom Wertish not too long ago to chat about nonprofit insurance needs (go watch our entire convo here!), and one of the ones that came to mind for us both is Employment Practices Liability Insurance (EPLI). Say that three times fast, right?
Most brand new nonprofit startups won’t need this quite yet – it usually takes a while before the nonprofit can hire paid workers. But, for a growing nonprofit ready to hire an employee (or a 1099 contractor), it’s time to consider an EPLI policy.
What is EPLI?
Most people think about workers’ comp policies when you’re talking about insurance policies about employees, but that’s not the only one. Workers’ comp covers bodily injury or death, but it doesn’t cover issues that might come up surrounding the worker’s actual employment.
EPLI policies give coverage for a lot of Human Resources issues, like sexual harassment, wrongful termination, and discrimination.
It always helps if the nonprofit has really solid HR procedures, but sometimes that just isn’t the case with the first employee or contractor hired. Plus, even with the best policies and procedures in places, sometimes things just don’t work out. You don’t want one angry employee to sink the nonprofit, right?
When would I need EPLI coverage?
Tom gave a really great example of when you’d definitely want EPLI.
Say you’re a board member at a nonprofit that’s been growing. Up til now, it’s been mostly volunteer-run, but now there’s room in the budget to hire an employee or a 1099 contractor for a brand new position.
A longtime volunteer puts in her application for the job, assuming she’s a shoe-in. But, for whatever reason, someone else gets the position. The volunteer then sues the nonprofit, claiming she was discriminated against because she’s pregnant.
Even if her suit has no legs, paying a lawyer to defend the nonprofit is going to be expensive. Much more expensive than getting a decent EPLI policy upfront, hmmm?
So, now what?
For all nonprofits with paid workers or considering hiring one, Tom and I really recommend considering an EPLI policy.
And, as always, if you choose to go for it, be sure to READ the policy to see what it actually covers. Some of the cheapest ones might not cover what you think they will! And, be sure to talk it through with an independent agent you trust.
I wholeheartedly recommend Tom, if you’re looking for someone to help you figure out your insurance needs. Check him out here!