Question

Which of the following is true about employment practices liability insurance (EPLI)?

It usually covers only legal costs associated with the termination of an employee.
It usually covers legal costs regardless of the outcome of the case.
It typically pays for punitive damages or civil or criminal fines.
It typically covers claims arising under workers' compensation.

Answer 1

EPLI, or employment practices liability insurance, typically covers legal costs regardless of the outcome of the case. It is separate from workers' compensation insurance and does not cover claims arising under it.

Step-by-step explanation:

EPLI, or employment practices liability insurance, is a type of insurance that covers legal costs associated with claims arising from employment practices. In regards to the options given:

1. It usually covers only legal costs associated with the termination of an employee. This statement is incorrect. EPLI covers a wide range of employment-related claims, not just those related to termination.
2. It usually covers legal costs regardless of the outcome of the case. This statement is correct. EPLI typically covers legal costs whether the case ends in favor of the employer or the employee.
3. It typically pays for punitive damages or civil or criminal fines. This statement is incorrect. EPLI generally does not cover punitive damages or fines.
4. It typically covers claims arising under workers' compensation. This statement is incorrect. EPLI is a separate insurance policy from workers' compensation and does not cover claims arising under it.

Based on the given options, the correct statement about EPLI is that it usually covers legal costs regardless of the outcome of the case. It is important to note that coverage may vary depending on the specific policy and terms.