EPLI, in simple terms:
Employment Practices Liability Insurance (EPLI) helps cover your business when someone says you treated an employee (or applicant) unfairly. Think of it as protection for hiring, firing, promotions, pay, workplace conduct and similar decisions.
What it can cover:
- Claims of wrongful termination, discrimination (age, race, gender, disability, etc.), harassment (including sexual harassment), and retaliation
- Claims tied to failure to hire or promote, defamation invasion of privacy
- Defense costs (lawyers, settlements/judgments) up to the policy limit
- Optional: third-party coverage for allegations from customers or vendors (e.g., a customer alleges harassment by an employee)
What it usually doesn’t cover (or is limited):
- Wage-and-hour issues (overtime, breaks, misclassification) are often defense-only with a smaller sub-limit—or excluded
- Workers’ comp, ERISA/benefit plan errors, bodily injury/property damage, and intentional fraud are not covered
- Criminal or punitive damages may be limited by state law and policy wording
How it works:
- Typically claims-made: the policy in force when the claim is made responds (not when the incident happened)
- Watch the retroactive date and reporting deadlines—late reporting can jeopardize coverage
- Expect a retention (like a deductible) you pay before the insurer pays
- Defense costs usually reduce the policy limit unless stated otherwise
Quick examples:
- An ex-employee says they were fired for reporting safety concerns (retaliation). The policy can fund the defense and a settlement.
- A candidate claims your job ad and interview process were discriminatory (failure to hire). EPLI responds.
- A customer alleges an employee used a slur (third-party harassment). Covered if you added third-party coverage.
Who needs it:
Any employer with even one employee. Small teams face the same claim types as large companies, and one claim can be expensive to defend.
What affects price:
Headcount, industry, prior claims, HR practices (handbook, training, documented procedures), and whether you include third-party or wage-and-hour defense.
Simple risk-reduction moves (insurers love these):
- Current employee handbook reviewed annually
- Consistent hiring, review, and termination processes with documentation
- Anti-harassment/discrimination training (including managers)
- Clear complaint reporting channels and prompt investigations
If you would like more information regarding EPLI insurance, please contact us. We will be happy to assist you with this coverage on your policy or answer any other questions that you might have!
