The Crucial Role of Third-Party EPLI Coverage for Tree Care Companies
Author, Rory Anderson, Partner, Account Executive, Rancho Mesa Insurance Services, Inc.
Operating a tree care business comes with numerous risks, from ensuring your team’s safety on the job to managing potential property damage. One crucial area of risk that is often overlooked is Employment Practices Liability Insurance (EPLI), specifically third-party coverage. Third-party EPLI can help protect your business from expensive lawsuits, making it essential for businesses that regularly interact with the public.
EPLI Coverage
EPLI is an insurance policy designed to protect businesses from claims related to employment practices. This includes allegations of discrimination, harassment, wrongful termination, and other workplace-related issues brought forth by employees. For many companies, EPLI is vital for covering the costs of defending against lawsuits, including legal fees, settlements, and damages.
While traditional EPLI coverage protects your business against employee claims, it is important to also consider third-party EPLI coverage.
Third-Party EPLI Coverage
Third-party EPLI coverage extends the protection of your EPLI policy beyond your employees. This provides an extra layer of protection for claims made by non-employees, such as customers, vendors, and members of the public. It covers allegations made by non-employees who may claim they were subject to harassment, discrimination, or wrongful conduct by your employees while interacting with your business. In the tree care industry, where workers frequently engage with clients, contractors, and the general public, this type of coverage is important.
Examples of Third-Party EPLI Claims in Tree Care
Harassment Allegation from a Homeowner. A tree care crew is performing work on a residential property when a homeowner accuses one of the employees of making inappropriate comments or gestures. The homeowner files a lawsuit for emotional distress, potentially resulting in costly legal fees.
Inappropriate Behavior from an Arborist in a Bucket Truck. While performing tree pruning, an arborist in a bucket truck sees a woman through a window who appears to be changing clothes. The woman later claims the arborist was staring at her inappropriately and files a harassment lawsuit against the tree care company. Even if the arborist did not intend any harm, this type of situation can lead to legal action and unnecessary costs.
Reasons Third-Party EPLI Coverage Is Essential for Tree Care Companies
High Interaction with the Public. Arborists and tree care crews often work in public spaces or on residential and commercial properties where they have frequent contact with non-employees, increasing the likelihood of third-party claims.
Legal Defense Costs. The costs of legal defense can add up quickly, whether or not your business is found liable. Third-party EPLI coverage can help offset these costs, preventing them from becoming a financial burden on your company.
EPLI Policy
Third-Party Coverage. Not all EPLI policies automatically cover claims made by non-employees. Be sure to confirm that third-party protection is included.
Defense Cost Outside Limit. If defense costs are deducted from the liability limit, they can quickly deplete your coverage, leaving less available for a settlement or judgment. It is crucial to look for a policy that offers defense costs outside the limit, ensuring that your liability coverage remains intact and fully available in the event of a claim.
Third-party EPLI coverage is an essential safeguard for tree care businesses, providing protection against claims made by non-employees such as homeowners, pedestrians, or subcontractors. With the high level of public interaction in this industry, the potential for costly lawsuits is significant. Ensuring your EPLI policy includes third-party coverage and defense costs outside the liability limit can help protect your business from unexpected legal and financial burdens.
To learn more about how EPLI insurance can protect your company, contact me at (619) 486-6437 or randerson@ranchomesa.com.