1851

Franchise giant McDonald’s has had a tumultuous end to 2019, to say the least. After news broke that <a href="https://1851franchise.com/mcdonalds-ceo-steve-easterbrook-fired-over-relationship-with-employee-2711491#most-recent">CEO Steve Easterbrook had been fired</a> for carrying on a consensual relationship with an employee, a class action lawsuit was levied against the brand claiming the presence of a systemic culture of sexual harassment. <a href="https://www.npr.org/2019/11/12/778530312/mcdonalds-is-sued-over-systemic-sexual-harassment-of-female-workers?utm_source=1851franchise.com&utm_medium=article&utm_campaign=epli-coverage-what-it-entails-and-why-you-need-it-2711870" target="_blank" rel="nofollow">According to an NPR report</a>, upwards of 50 individual claims of harassment of female employees are pending against McDonald's, both in court and at the Equal Employment Opportunity Commission.Beyond just the social and cultural ramifications the brand stands to face as a result of these suits, the financial ramifications harassment and discrimination claims bring about are palpable, even for a company as well-resourced as McDonald’s. So, what should businesses be doing to ensure they are not exposed to <a href="https://1851franchise.com/mcdonalds-new-lawsuit-proves-the-brand-may-have-a-long-road-ahead-2711596#most-recent">the same bottom-line vulnerability McDonald’s is currently grappling with</a>?&nbsp;It begins with employment practices liability insurance, EPLI, for short—namely, understanding what it is, what it covers (and doesn’t), and what companies should be doing organizationally to ensure they have systems in place to protect themselves.The EEOC defines sexual harassment as “unwelcome sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature when this conduct explicitly or implicitly affects an individual’s employment, unreasonably interferes with an individual’s work performance, or creates an intimidating, hostile, or offensive work environment.”Sexual harassment claims such as those facing McDonald’s fall within the realm of EPLI coverage, as do other forms of harassment and discrimination including those on the basis of race, ethnicity, sexual orientation and age, among others. And while applicable to all businesses, EPLI coverage holds particular importance in the franchising space due to the threat claims can pose to not only franchisees but franchisors, too.“The world is different than it was even 20 years ago. Toxic organizational cultures are being revealed because people won’t take it anymore,” said Doug Groves, insurance expert and president of franchise insurance compliance solution <a href="https://www.certmgmt.com/?utm_source=1851franchise.com&utm_medium=article&utm_campaign=epli-coverage-what-it-entails-and-why-you-need-it-2711870" target="_blank" rel="nofollow">EZ CERT</a>. “Businesses must remember that as soon as they hire even one employee, they open themselves up to exposure. It’s a liability that you cannot ignore, and you need EPLI coverage because you don’t want the whole company to go down because of the actions of a few.”As with any claim, the specific facts and circumstances surrounding the matter will be critical in determining whether EPLI coverage is ultimately triggered. That being said, Groves warned that while coverage is indeed available to protect franchisors and franchisees in the event these claims arise, <a href="https://theintercept.com/2019/02/02/workplace-harassment-insurance-metoo/?utm_source=1851franchise.com&utm_medium=article&utm_campaign=epli-coverage-what-it-entails-and-why-you-need-it-2711870" target="_blank" rel="nofollow">insurance companies are treating them differently than they were in the past</a>, so it behooves franchisors to look inward and establish the necessary systems organizationally to prevent these situations in the first place. The onus, Groves said, ultimately falls on companies to have the proper organizational structure to get the coverage needed to be protected in the event a claim arises.&nbsp;“As an owner, it is ultimately your responsibility to provide a safe work environment,” Groves said. “Make sure you’re protecting your employees and customers, and as a result, your bottom line. With insurance, you can ensure those affected can be taken care of, but other steps should be taken to educate and inform. Train your staffs and franchisees on what harassment and discrimination look like to not only ensure specifically targeted language isn’t used that can give rise to an EPLI claim, but, most importantly, also so they know that if they hear or see something, they need to notify the management team immediately.”Put simply, business owners—and franchisors, for that matter—need to establish protected channels for employees to report incidents of harassment and discrimination confidentially. Such channels come in many forms; some companies employ a third-party company that has a hotline they can call to report incidents, while other businesses use in-office secure submission boxes for claims.Harassment and discrimination that arise in the workplace, whether sexual in nature or on the basis of age, race or ethnicity or otherwise, is a serious matter and needs to be addressed swiftly and systematically in order to keep a business or franchise from facing an EPLI claim. By taking the necessary steps to create a culture in which such behavior is reprehensible, businesses are best positioned to prevent such issues from arising—and in the event they do, insurance is there to protect the impacted.

EPLI Coverage: What It Entails and Why You Need It

1851 Franchise

In the face of sweeping cultural change, businesses need look inward and take the necessary measures to protect themselves, both through the proper insurance coverage and organizational initiatives.

This brand page has been paid for by 1851. Content within this page that is paid will showcase a Sponsored icon. This means the brand has engaged 1851 FRANCHISE to write the content. Content without the Sponsored Icon is aggregated media placements the brand earned. Questions can be sent to editorial@1851franchise.com

epli-coverage-what-it-entails-and-why-you-need-it

New U Women's Clinic & Aesthetics

image of New U Women’s Clinic & Aesthetics employees and franchise

How New U Is Redefining Women’s Health, Offering a Scalable Franchise Opportunity as the Next Big Category Creator in the $21 Billion Med Spa Industry

womens-health-wellness-franchise-new-u

image of New U Women’s Clinic & Aesthetics Founder and CEO Dr. Rachel Fidino

The Void in Women’s Health, Solved By a Two Time Cancer Survivor: How New U Built Care that Didn’t Exist and is Eying National Franchise Expansion

new-u-womens-clinic-consumer-positioning

SweatHouz

SweatHouz Expansion - Tribeca Opening and 12 NYC Franchise Units - 1851 Franchise

SweatHouz Franchise Expands Into New York City With 12-Unit Development Agreement Across Manhattan and Brooklyn

sweathouz-new-york-tribeca-expansion

DoodyCalls

How This Family Built a Fast-Growing DoodyCalls Business in Greensboro, North Carolina

families-in-franchising-robert-thomas-doodycalls-greensboro

Sparkle Squad Window Cleaning Services

Sparkle Squad Franchise - Ryan Fraser - Franchisee Feature - 1851 Franchise

Commercial Real Estate Veteran Leverages Commercial Work To Grow Sparkle Squad Franchise

sparkle-squad-franchise-new-jersey-ryan-fraser

Buying a Franchise Masterclass

 Franchise Opportunities

Get Support Buying a Franchise

How to Buy a Franchise White Paper

How to Buy a Franchise

How to Sell Franchises

How to Grow a Franchise

Find a Franchise Supplier

1851 Franchise Opportunities

Franchisor News

Franchisor Power Rankings

FranCamp Mastermind Summit

Franchise Development Website Builder

Franchise Resources

Website Awards

Power Rankings

About 1851

Advertise on 1851

Contact 1851 Editorial

Terms of Use

1851 Login

GROWTH CLUB LOGIN

facebook

instagram

twitter

linkedin

youtube

Hardee's Franchise - ARC Burger Lawsuit - 1851 Franchise

Hardee’s Lawsuit Targets Franchisee as 77 Restaurants Prepare to Shut Down

hardees-franchise-closures-arc-burger-lawsuit

Domino's Franchise - North Pole - Dec 2025 - 1851 Franchise

Domino’s Pizza Brings Delivery Cheer to North Pole, Alaska

dominos-pizza-franchise-north-pole-alaska

California Pizza Kitchen’s Sale Is the Latest in the Era of PE-Backed Turnarounds in Franchising

california-pizza-kitchens-sale-is-the-latest-in-the-era-of-pe-backed-turnarounds-in-franchising

Buying a fitness franchise, people exercising

Boutique vs. Big Box Gym Franchises: Which Offers Best ROI in the $7 Billion Fitness Market?

buy-fitness-franchise-boutique-big-box-comparison

Pieology Pizza Enters Chapter 11 Following Costly Bid To Save Struggling Stores

pieology-pizza-files-chapter-11-bankruptcy

Paris Baguette Welcomes Zac Sulma as New Chief Operating Officer

new-coo-zac-sulma

AI-related job cuts, October U.S. job cuts, American job cut record

AI-Fueled Layoffs Reshape the U.S. Job Market — And Highlight Franchising’s Resilience

ai-job-cuts-franchising-path-forward

As Starbucks and Dunkin’ Navigate a Changing Market, New Coffee Players Keep Gaining Ground

starbucks-dunkin-franchise-coffee-market-trends

Senior Entrepreneurship - Franchising - 1851 Franchise

Senior Entrepreneurship Is Rising — And Franchising Is a Key Outlet

senior-entrepreneurship-franchising-silver-startups

Do You Qualify? A Look at the Chick-fil-A Franchise Requirements

do-you-qualify-a-look-at-the-chick-fil-a-franchise-requirements

The Top 15 Pet Supplies and Retail Franchises for 2025

the-top-15-pet-supplies-and-retail-franchises

Scenthound Franchise Costs, Fees, Profit and Data for 2025

scenthound-franchise-costs-fees-profit-and-data

Christmas Decor Franchise Costs, Fees, Profit and Data for 2025

christmas-decor-franchise-costs-fees-profit-and-data

Ellianos Coffee Franchise Costs, Fees, Profit and Data for 2025

ellianos-coffee-franchise-costs-fees-profit-and-data

1851 Franchisee Spotlight graphic with photo of Eli Cohen, Layne's Chicken Fingers logo

EPLI Coverage: What It Entails and Why You Need It

MORE STORIES LIKE THIS