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EPLI — Employment Practices Liability Insurance

EPLI is an abomination to society, and is a travesty to our rights, and is against public policy, is truly unconscionable, and our “Family-Friendly” Missouri Legislature allows it

Can you think of any type of insurance that “protects” a wrongdoer who engages in INTENTIONAL wrongdoing? Welcome to EPLI. The employer INTENTIONALLY violates the law, and then collects money for doing so.

I can’t think of any other insurance product that specifically exists to compensate for INTENTIONAL wrongdoing, other than EPLI.

EPLI is toxic and evil stuff that must be banned – it does bad things for the common working people. We have the raw power to crush this poison, with a LOT of work — But do we have the “Family-Friendly” governmental will? Read on.

Most often, employment law cases are all-about proving INTENTIONAL law violations. Should employers be able to get insurance for intentional violations of the law? I would bet you answer “No”. Well, your Missouri Legislature allows it. SURPRISE! (Are they really “family friendly” as they claim?)

Do you think your auto insurance would compensate you for getting angry one day and saying: “I’m going to kill you”, and then you drive your car into your enemy’s car, destroying your own car and his, and killing him in the process, and then you go to prison — What compensation should you get?

Would it be better to allow insurance for this type of INTENTIONAL wrongdoing, or would it be better not to allow such insurance? The answer is clear. — While that may not be the best analogy, I think it gets my point across.

Another example: Do you think a food company would get compensation from its insurance company if the prosecutor proved that the executives sat around and planned a scheme to make money by substituting cheap poisonous ingredients for expensive FDA-approved ingredients, and lying about it to the FDA? The answer is no.

Insurance is for accidents and unforeseen events, except permanent life insurance which pays even at natural death.

I used to be in the insurance business and I have a deeper understanding of the insurance business than most people that I speak with — I cannot think of any type of insurance that specifically exists to cover INTENTIONAL law violations, other than EPLI — It is unconscionable that we as a society of goodwilled people allow EPLI to exist. FYI “Unconscionable” is a legal term that basically means “this is too bad for us to tolerate”.

Here is the way most EPLI policies work:

  • You begin to make legal trouble, arguing that the employer intentionally violated your rights.
  • The employer notifies its EPLI carrier, who then steps in and begins to defend against the case, which does not yet have to even be a court case. It can be nasty letters from lawyers, or EEOC charges, etc.
  • The insurance company’s lawyers have a contract with the insurance company to provide cut-rate legal services in order to get a high volume of referrals.
  • So the insurance company’s lawyers need to keep the case alive as long as possible to maintain the revenue stream from legal fees.
  • So the insurance company’s lawyers do not advise their clients to settle, and instead, they make it a point to fight against you as hard as possible to drive up fees — they are allowed to do this by the rules governing lawyers — and often the lawyers truly believe you cannot prove your case — but that is not the only criteria involved in good faith settlement talks — So very often, when employers have EPLI, the employer’s lawyers will not make reasonable settlement offers.
  • Management-focused law firms have seen their business plunge in the depression, which we comically call “The Great Recession”. So, management-focused law firms have every incentive to keep cases alive and not push the clients to settle — This is a sea-change from many years ago, when companies incurred legal fees in these kind of disputes and therefore had an incentive to end the cases quickly and stop the bleeding — YOU suffer from the current situation, believe me.
  • If you actually end up in litigation, in a court of law, then the EPLI lawyers might offer a settlement at some point — If you win a judgement, the EPLI carrier will pay it — either way, your employer has no risk other than his deductible, most likely
  • Some EPLI policies do place some of the financial risk on the employer, but when the employer is not on the hook for much legal fees and damages, then the common workers have mucho less leverage to get an honorable settlement.
  • Example — If the employer has a 5K deductible, and insurance covers the balance, what are the chances that the employer would pay a larger settlement than the deductible? — This is bad news for employees in Missouri and should not be allowed.

Here is what needs to happen:

  • EPLI should be banned as “Against Public Policy” — EPLI makes it cheap to violate our civil rights INTENTIONALLY.
  • If we decide in Missouri to allow for insurance coverage against INTENTIONAL civil rights violations, then the insurance should not be allowed to pay any legal fees up front, but could be allowed to reimburse an employer for damage awards and settlements. The mere availability of coverage for legal fees, up front, greatly reduces the chance of YOU getting any justice — The employer does not feel any pain from the wrongdoing, because an insurance company picks up the tab.
  • YOU should contact YOUR State Representative and State Senator if you agree with me.

Article written by | Tim Willoughby


***** END OF ARTICLE *****

Timslaw.com Missouri Employment Law

Maintained by Attorney Phil Willoughby
Founded by Tim Willoughby, Esq. (1959-2013)

Phil is a Missouri employment lawyer who is licensed to practice in Kansas and Missouri, and primarily takes cases in Saint Louis and Kansas City. He is a member of the Missouri Bar Association and Kansas Bar Association. Additionally, he has practiced in the United States Federal Courts of Missouri in St. Louis and Kansas City. He has also practiced in the Kansas Federal District Court in Kansas City, Kansas.

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Phil Willoughby, Attorney
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