Employment Practices Liability Insurance (EPLI) covers claims arising from wrongful termination, harassment, discrimination, or other employment-related issues. Especially relevant as workplaces face increasing scrutiny over HR practices.
Employment Practices Liability Insurance (EPLI)
What Is EPLI Insurance?
Employment Practices Liability Insurance (EPLI) covers a business against lawsuits related to employee claims — including wrongful termination, harassment, discrimination, retaliation, failure to promote, and other workplace-related allegations. It protects the company, its executives, and HR personnel against defense costs, settlements, and judgments from employment claims — whether from current employees, former employees, or applicants.
Who Needs EPLI Insurance?
Even a single claim of harassment or discrimination can result in six-figure legal bills — regardless of whether the claim is valid. Employment claims are among the most common lawsuits facing businesses today, and even well-run organizations with strong cultures can find themselves in litigation. EPLI offers critical financial protection and helps ensure you can weather an employment dispute without draining your company’s resources or reputation.
Common industries that often require EPLI Insurance include:
- Companies with employees — especially over 10 people
- Fast-growing companies hiring rapidly
- Businesses in states with strong employee protection laws (e.g., CA, NY)
- Companies with high turnover or public-facing employees
- Organizations without a formal HR department
What Does EPLI Insurance Cover?
EPLI Insurance typically covers:
- Wrongful termination
- Sexual harassment and hostile work environment
- Discrimination (age, race, gender, disability, etc.)
- Retaliation
- Defamation or emotional distress
- Invasion of privacy
- Failure to promote or hire
What Doesn’t EPLI Insurance Cover?
While EPLI Insurance offers broad protection, it doesn’t cover:
- Wage and hour violations (unless endorsed)
- Workers’ compensation and OSHA claims
- Intentional misconduct
- Breach of contract
- Benefits and ERISA violations (covered under Fiduciary Liability)
How Much Does EPLI Insurance Cost?
The cost of EPLI Insurance varies based on factors like business size, industry, location, and claims history.
Key Cost Factors:
- Employee count and locations
- HR policies and training programs
- Claims history
- Industry risk profile
- Use of arbitration clauses or employment agreements
Typical Cost Range:
- Small Business: $1,000–$3,000/year
- Mid-size Business: $5,000–$15,000/year
- Large Organization: $20,000–$100,000+/yea
- High-risk Industries: $20,000–$100,000+/year
Risk Management Tips
To minimize potential claims:
- Implement and enforce anti-harassment and DEI policies
- Conduct regular HR training and documentation
- Maintain consistent hiring and firing practices
- Consider using employee handbooks and signed policies
- Engage legal counsel for complex HR situations
Talk to An Expert
Our dedicated experts are ready to provide tailored insurance solutions to clients across a wide range of industries and specialized services.
Schedule a consultation to see how Alliance Risk can reduce your insurance risk.
– We look forward to partnering with you.