Employment practices liability covers claims made by employees, former employees and sometimes candidates, about how they were treated.
What it covers
Allegations of wrongful termination, discrimination, harassment, retaliation, and failure to follow required process in hiring or dismissal.
Why it is separate
General liability covers injury and property damage. Workers compensation covers injury at work. Neither reaches a claim about a decision.
Defence costs arise regardless of merit
This is the practical point. Responding to a claim costs money from the day it is filed, whether it is well-founded or not, and for a small business those costs alone can exceed the amount in dispute.
What reduces exposure
Written policies that are actually applied, consistently, to everyone.
Documented reasons for decisions about people, made at the time rather than reconstructed afterwards. A dismissal supported by contemporaneous records is a different position from one supported by recollection — which is one of the reasons for record retention.
Following the process the business itself set out. Departing from an internal policy is frequently more damaging than not having had one.
Small businesses are not exempt
Thresholds vary by law and by claim type, and many protections apply from the first employee. A business assuming it is too small to be covered by employment law is usually wrong about that.
The specifics are jurisdictional and belong with an employment attorney.