Restaurant / Bars Blog

Why Your Restaurant or Bar Needs EPLI

discriminationEmployment Practices Liability Insurance (EPLI) is an essential insurance policy for all restaurants and bars, whether a national chain restaurant or a “mom and pop” operation.

EPLI covers costs resulting from lawsuits that assert wrongful employment practices, including discrimination, harassment and wrongful termination. Even if you consider your restaurant or bar to be a friendly, safe and fair environment for all employees, these types of lawsuits can happen to anyone. As of 2005, the average wrongful termination lawsuit settlement payouts are between $300,000 and $500,000 (www.ehow.com). Do you have the proper insurance coverage to protect yourself and your assets from this type of claim?

Below, Tegner-Miller Insurance Brokers has compiled a few examples of EPLI cases:

  • In 2009, a major restaurant chain settled a gender discrimination case filed by female workers who alleged they received fewer opportunities for career advancement than male employees. The case was settled for $19 million in damages. (www.nbcnews.com).
  • In 2009, a high-end Los Angeles steak house chain had to pay more than $1 million to settle a federal discrimination lawsuit that alleged that for decades the chain only hired females as servers (www.gazette.com).
  • In a particularly well known case, a national restaurant chain paid a total of $54 million to thousands of individuals in settlement of allegations that the chain discriminated against African-American customers (www.nytimes.com). While cases such as this one involve clients rather than employees, they may be covered under certain EPLI policies. When you purchase your policy, be sure to ask about third-party liability coverage, which can often be added to your regular EPLI policy for an additional fee.

These examples highlight the importance of having the proper insurance coverage in place that protects you from unexpected expenses such as those associated with allegations of improper employment practices.

While EPLI coverage is essential, you should work to prevent these types of incidents. Be sure to train and educate all of your employees on topics including discrimination and sexual harassment.

Please contact your knowledgeable broker at TMIB if you have any questions about EPLI coverage we can be reached at 310-828-9662.