Privacy Is New Hot Workplace Issue for EPLI Claims

About 40 percent of employment practices liability policies (EPLI) that I review fail to cover allegations of employment-related breach of privacy. These range from complaints that the employer failed to protect sensitive medical information properly to accusations of “spying” in areas such as locker rooms where employees might have a reasonable expectation of privacy.

I continually review a variety of EPLI products, both as monoline insurance policies and as policies packaged with other coverages, with my work for RiskProNet International, an association of independent brokers in North America. The findings indicate that far too many businesses fail to appreciate the risk of privacy complaints, as well as the potential for cyber liability claims concerning privacy.

The plaintiffs’ bar predicts that privacy will soon replace wrongful termination as a hot workplace issue, according to the Fair Measures Inc. website.

New Questions

Technology is posing new questions for employment practices underwriters.

A California woman filed a lawsuit after her employer told her to install an application on her smartphone that monitored her locations. She felt that was a reasonable request during working hours, but she objected to the fact that the app operated 24/7.

An article in Inc. magazine with the title, “When Monitoring Your Employees Goes Horribly Wrong,” outlines additional pitfalls. In perhaps the most unusual case, a surveillance camera was mounted on a drone to monitor work on the upper levels of a construction site. It captured video of two employees having an amorous moment during their break. The employees were fired, and successfully sued the company, saying they could not have been seen from the ground and they expected privacy during the work break.

Common Situations

Below are the most common situations leading to workplace privacy lawsuits, according to Nolo Press:


Cyber insurance could potentially address some of these issues, but there is great variety among cyber insurance products, and recent surveys indicate only about 35 percent of employers are actually purchasing cyber insurance.

Appropriate coverage is available in the marketplace. Consider EPLI “fine print” when reviewing policies to make sure these provisions are present:

language on employer-provided technology, such as cell phones and other electronic devices?

If the answer is yes, approach the underwriter for improvements in the language relating to the exact exposure situation.

Be sure that the questions on the application that address specific employer-related electronic surveillance methods are answered fully and truthfully.

Beware of policy language that seems to impose unfair restrictions.

If your EPLI insurer doesn’t meet these standards in having “employment-related” breach of privacy as a covered wrongful employment practice, then it’s important to seek it elsewhere. If this exposure isn’t addressed in the EPLI main definition, it’s unlikely that it can be added by endorsement. Share this article with a colleague.