Employment Practices Liability Protection

Hiring, firing, employee evaluation, compensation, family leave, job descriptions, etc.
These human resources decisions have a huge impact on your employees, their productivity and their well-being. They can also become a breeding ground for complaints and claims of unfair employment practices, and those claims can be disastrous for your business. Having Proper Employment Practices Liability Insurance (EPLI) can give your business the protection it needs.

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Prepare and prevent

Employee lawsuits are not just a risk for large companies. Small and medium-sized businesses are just as likely to have an employment claim filed against them as their larger counterparts. Car washes are particularly vulnerable to employment practice claims due to the nature of the work. Additionally, since most car wash businesses don’t have the formal legal or human resources departments to guide them through federal and state regulations that can put them at risk, it can be especially difficult to navigate. in these situations.

You don’t think you need it?

Car wash owners often ignore EPLI coverage because they don’t think their employees would sue them. Even if your car wash runs like a family business, problems can still arise. With the array of complex laws, rules and regulations, not having EPLI coverage could end up costing your business dearly if an employee takes legal action against them for violating their rights.

You can spend thousands or even millions of dollars defending an employment practices claim, even if a lawsuit is without merit. Many businesses end up settling the claim just to end the expense and disruption, and some have to shut down completely.

The good news? There are ways to protect your business.

EPLI versus Workers Compensation

Generally, workers’ compensation insurance covers physical illness and injury, while EPLI protects your business if an employee or potential employee alleges that their rights are violated. EPLI covers legal defense costs and judgments up to specified policy limits.

Five Basic Steps to Reduce Workplace Complaints


If your company doesn’t have an employee handbook, create one. What it contains depends on the size of your business, union status, industry, and the mix of professionals versus departments, among other factors. Here are some key things to include:

A policy of equal employment opportunities

An anti-harassment policy

An internal procedure for employees to follow if they have a workplace complaint

An employment policy at will

A code of ethics

A social media policy

A policy relating to the Family and Medical Leave Act.


In the event of a claim, an employee handbook can provide evidence that your company has made a good faith effort to follow policies that promote fairness and equity among employees. After creating your manual, be sure to do the following:

Provide all employees with a copy of the manual

Require them to sign an acknowledgment of receipt.


Supervisors and managers should periodically receive instruction on workplace issues, such as:

Dealing with Difficult Employees

Employee complaints



Procedures for handling complaints of harassment or discrimination in the workplace.


Clearly communicate all zero-tolerance policies to employees that involve:

substance abuse



Other occupational exposures

Sound policies promote fairness among employees and can serve as a defense in a lawsuit.

Check your coverage

EPLI is an essential policy that will protect your business from employee lawsuits. Despite the high likelihood of a lawsuit occurring, many car wash companies choose not to purchase EPLIs because they believe their occupational exposures to employee lawsuits are covered by other policies they have – they are not. EPLI offers:

Valuable protection against claims for allegedly wrongful employment practices

Expert assistance for legal representation and claims

Deductibles, differences in coverage arrangements and exclusions can greatly affect the cost of coverage and should be tailored to each business’s needs.

EPLI Snapshot

EPLI protects owners, managers, supervisors and employees against a wide variety of claims, including:

Discrimination (based on gender, race, age or disability, for example)



Unjustified discipline

Lack of promotion

bad ending

Unfair hiring practices

Defamation among other wrongful employment issues.

A costly scenario

No organization is immune to employment practices liability. Here are concrete examples of their cost. Seventeen car wash workers have filed lawsuits against a Chicago car wash operator. The workers claimed they were paid below the minimum wage rate for tipped employees and had never been paid overtime despite regularly working more than 40 hours a week. Employees quickly
reached early settlements, costing the owner $725,000.1

In the largest per-worker takeover in the car wash industry, 18 immigrant car wash workers in New York and New Jersey were awarded more than $91,000 each. The agreement awarded the final part of a $1.65 million settlement to 18 workers who earned less than $20,000 a year at four car washes.2

Wage and hour claims

Some EPLI policies do not cover wage and hour claims. Employees can sue their employer for not allowing proper breaks, not paying overtime, and other related issues as shown in the scenario above. Talk to your insurance professional to make sure your EPLI policy covers this important issue.

Complaints related to COVID-19

An unprecedented pandemic has sparked unprecedented concern and EPLI demands. It is important to exercise caution and follow the rules when it comes to protecting an employee’s vaccination status and exemptions. Employees can sue employers for enforcing COVID-19 vaccinations in claims of discrimination, religious discrimination for those with strong religious beliefs, and disability discrimination for those with health exemptions.

Managers should also be careful not to disclose an employee’s vaccination status – disclosing an employee’s status is a violation of the Americans of Disabilities Act (ADA).

Employers are not allowed to ask their employees if they are vaccinated during interviews, as this may be another complaint of discrimination or unfair hiring practice.


1 https://www.nolanwagelaw.com

2 https://www.Reuters.com

Sam Furno has been in the car wash industry for over 22 years and is a former full-service owner/operator. He is Senior Vice President of Alliant Insurance Services and directs the Western Carwash Insurance Program (WCIP), established in 1994. WCIP is part of Alliant, one of the 10 largest insurance brokerages in the country and offers car wash insurance programs in the United States. free to contact Sam at [email protected] or call 916-210-0311 directly.