How Dental Practice Owners Can Be Prepared for Employer Practices Liability

According to the U.S. Chamber of Commerce 48% of employer practice liability claims are filed against small businesses. Dental offices can be lucrative targets for former employees and their attorneys because most claims are settled without trial.

Dr. L owns a single-location, full-service dental practice in Western Washington. His practice employs about 50 team members.

Dr. L terminated an employee who had been habitually late to work. He let the employee go after providing them with several, documented warnings. Now, Dr. L wants other practice owners to know that they are at risk for claims from employees.

“Dentists can be an easy target for law firms that specialize in these kinds of employee claims because the laws in Washington State are not written to protect us,” says Dr. L.

Dr. L’s practice was hit with a class action suit. It surprised Dr. L because he thought class action was reserved for large corporations.

“The former employee and their attorney contacted many former employees of my practice in an effort to grow the claim,” he says. “Fortunately, I have employer practices liability insurance or EPLI policy through WDIA. After some coordination with WDIA, my EPLI legal team just handled it.”

The claim still cost Dr. L stress and effort. His office manager had to provide five years of payroll records. He had to attend mediation, taking time away from the practice.

“I learned the former employee has a track-record of filing wrongful termination claims,” says Dr. L. “When I checked references, other doctors probably couldn’t tell me about it because of non-disclosure agreements.”

Why Practice Owners Need Employer Practices  Liability Coverage

Lawsuits filed against practice owning dentists by former employees are on the rise. EPLI safeguards you and your practice against claims from current or former employees. The claims might include allegations of:

• Wrongful termination
• Discrimination (age, race, gender, disability, etc.)
• Harassment (sexual or otherwise)
• Retaliation
• Failure to promote
• Breach of employment contract

Employee practices liability claims are different from  malpractice claims covered by your individual practices liability policy. EPLI claims are business-related employment disputes that can arise in any workplace. The more team members you have, the higher your risk is for a claim. 

Can a Dental Office Owner Employer Practices Liability Add to Existing Coverage?

Adding EPLI as a rider to your business owner’s policy (BOP) is usually possible and practical. Many BOPs that bundle property, liability, and business interruption coverage, offer EPLI as an optional rider. This is often the most cost-effective and convenient way to purchase an EPLI policy. 

In some cases, especially if your practice has a large number of employees, and / or a history of claims, EPLI may need to be purchased as a standalone policy. Independent EPLI policies can offer broader coverage limits and more tailored risk management resources, which can be valuable for growing and multi-location practices.

Key Features to Look For in EPLI

At WDIA we help dentists evaluate elements of the EPLI policy options, including: 

• Coverage Limits: It’s important to ensure the policy offers adequate protection for legal fees, settlements, and potential damages.
• Defense Costs: We help clarify whether defense costs are inside or outside your policy’s limits.
• Third-Party Coverage: Some EPLI policies cover claims made by non-employees, such as vendors, which can be valuable in certain situations.
• Risk Management Services: Many insurers offer HR hotlines, employee handbook templates, or legal consultations which are helpful tools for minimizing risk.

EPLI is Essential for Practice Owners

The most common areas where dental practice owners face risk for claims from current or former employees include:  

• Documentation related to breaks, hourly compensation, and other wages. 
• Complex labor laws related to hiring, management, and termination. 
• Gaps in practice policies and implementation. 

If it’s time to talk about EPLI coverage or update your policy, please get in touch with an expert from our team to discuss your options.