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

Comfort Keepers

Comfort Keepers - Midyear Press Release 2025 - 1851 Franchise

Comfort Keepers® Hits Mid-Year Stride With Strong Franchise Growth and Rising Demand for In-Home Care

comfort-keepers-franchise-midyear-momentum-2025

petbar

petbar - Garrett Dewan - Why I'm Investing - 1851 Franchise

Why Garrett Dewan Is Choosing To Reinvest in petbar

petbar-franchise-austin-garrett-dewan-multi-unit

Paris Baguette

NJBIZ: Paris Baguette Ramps Up Expansion With New Franchises, Facility and 2030 Growth Target

njbiz-paris-baguette-ramps-up-expansion-with-new-franchises-facility-and-2030-growth-target

Busy Bee Jumpers

Top 10 Reasons To Buy a Busy Bee Jumpers Franchise in 2025

top-10-reasons-to-buy-a-busy-bee-jumpers-franchise-in-2025

Home Halo

home-halo-former-athletes-frachisees-image

Why Former College Athletes Can Make Winning Home Halo Franchise Owners

former-college-athletes-home-halo-franchise

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

What ALEC-Laffer's Report Means for Franchising

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

Wendy's CEO Kirk Tanner Steps Down - Breaking News - 1851 Franchise

Wendy’s CEO Kirk Tanner Steps Down Amid Challenges, Leaving Franchisees Facing Uncertainty

wendys-ceo-transition-kirk-tanner-franchisee-uncertainty

"Come in, We're OPEN" sign against abstract background

Small Business Optimism Dips, Raising Concerns for Franchise Owners

small-business-optimism-dips-raising-concerns-for-franchise-owners

Photo of Roof Scientist truck and trailer

Roof Scientist Expands Into Northern Indianapolis as Entrepreneur Dale Speckman Launches New Business in Fishers

roof-scientist-expands-into-northern-indianapolis

Image of Donald Trump pointing with red stripes in the background

August 1 Tariff Deadline Is Said to Have ‘No Extensions’: What This Could Mean for Franchises

august-1-tariff-deadline-franchise-impact

What June’s Jobs Report Means for the Franchise Industry

what-junes-jobs-report-means-for-the-franchise-industry

Hooters Leans Into Franchising With Closure of 30 Company-Owned Stores - Agg - 1851 Franchise

Hooters Leans Into Franchising With Closure of 30 Company-Owned Stores

hooters-franchise-model-company-owned-closures

Technomic Releases Annual Ranking of the Top 15 Fast-Food Chains in the U.S.

technomic-releases-annual-ranking-of-the-top-15-fast-food-chains-in-the-us

The Ultimate Guide to Selling Franchises: How To Create a Strong Incentive

how-to-build-strong-incentives-to-attract-prospective-franchisees

From Prescriptions to Pastries: Kari Khandelwal Creates a Comforting Community Bakery 

From Prescriptions to Pastries: Kari Khandelwal Creates a Comforting Community Bakery in Overland Park, Kansas

paris-baguette-franchise-overland-park-khandelwal

Kansas Couple Revitalizes Local Childcare With Children’s Lighthouse

From Corporate Careers to Community Roots: Kansas Couple Revitalizes Local Childcare With Children’s Lighthouse

kansas-couple-opens-childrens-lighthouse-gardner-olathe

Hely and Hiral Patel Bring Their Longtime Dream to Life With The Brass Tap

brass-tap-franchise-pasadena-maryland-hely-hiral-patel

Franchisee spotlight graphic with photo of Ricki Oberoi and Layne's Chicken Fingers logo

EPLI Coverage: What It Entails and Why You Need It

MORE STORIES LIKE THIS