Employment Practices Liability Insurance (EPLI)
Protection when employees, former employees, or job applicants sue your business.
Employment-related lawsuits are among the most expensive claims businesses face. Wrongful termination, discrimination, and harassment allegations can cost hundreds of thousands in legal fees alone—even when you've done nothing wrong. EPLI protects your business from these devastating employment claims.
Get an EPLI Quote
Protect your business from costly employment claims
What EPLI Covers
Wrongful Termination
Claims that an employee was fired illegally or in violation of employment contracts. This includes allegations of termination based on protected characteristics, retaliation, or breach of implied contracts.
Discrimination
Allegations of unfair treatment based on race, gender, age, religion, disability, national origin, pregnancy, or other protected classes. Covers both individual claims and class action lawsuits.
Sexual Harassment
Claims of unwelcome sexual advances, requests for sexual favors, or other verbal or physical harassment of a sexual nature. Includes both quid pro quo and hostile work environment claims.
Retaliation
Allegations that an employee was punished for filing a complaint, participating in an investigation, or exercising their legal rights. One of the fastest-growing categories of employment claims.
Failure to Promote or Hire
Claims that someone was denied a job or promotion due to illegal discrimination. Includes allegations of unfair hiring practices, biased interview processes, or discriminatory promotion criteria.
Defense Costs
Attorney fees, court costs, depositions, expert witnesses, and other legal expenses. EPLI covers your defense even if the claim is baseless—and employment lawsuits are expensive to defend.
Who Can File Claims Against You?
EPLI covers claims from multiple sources—not just current employees:
Current Employees
Claims of ongoing harassment, discrimination, hostile work environment, or unfair treatment while still employed.
Former Employees
The majority of EPLI claims. Wrongful termination, retaliation, and discrimination discovered after leaving.
Job Applicants
Failure to hire claims, discriminatory interview questions, or biased hiring practices allegations.
What's NOT Covered
Understanding exclusions helps you manage risk appropriately:
Who Needs EPLI?
Any business with employees faces EPLI exposure. Even companies with excellent HR practices get sued. In fact, businesses with fewer than 100 employees account for the majority of EPLI claims—often because they lack dedicated HR staff.
Any Business with Employees
Even one employee creates EPLI exposure—60% of claims come from small businesses
Growing Companies
Rapid hiring/firing increases risk; less established HR processes
Industries with High Turnover
Restaurants, retail, healthcare see more termination disputes
Businesses with Diverse Workforces
More opportunities for discrimination allegations
Companies in Restructuring
Layoffs and reorganizations trigger wrongful termination claims
Managers and Executives
Many policies cover individual managers named in lawsuits
Real Claims Examples
See how EPLI responds to common employment claims:
Age Discrimination Lawsuit
Scenario: A 58-year-old manager is laid off during company restructuring. She claims the company kept younger, less experienced employees and sues for age discrimination.
Coverage: EPLI pays $85,000 in legal defense costs over 18 months of litigation, plus a $150,000 settlement. Without coverage, this $235,000 total could devastate a small business.
Wrongful Termination Claim
Scenario: An employee is fired for poor performance but claims it was retaliation for reporting safety concerns to management. He files an EEOC complaint and then a lawsuit.
Coverage: EPLI covers the EEOC response, legal defense ($45,000), and eventual $75,000 settlement. The policy also provides access to employment law attorneys who specialize in these cases.
Sexual Harassment Allegation
Scenario: A former employee alleges that a supervisor created a hostile work environment through inappropriate comments and unwanted advances over two years.
Coverage: EPLI pays for immediate legal consultation, investigation costs, defense attorney fees ($120,000), and a confidential settlement. The insurer also provides crisis management guidance.
Failure to Promote
Scenario: A qualified employee is passed over for promotion three times in favor of less experienced candidates. She alleges gender discrimination in the company's promotion practices.
Coverage: EPLI covers legal defense costs, expert witness fees for statistical analysis of promotion patterns, and settlement negotiations. Total claim cost: $95,000.
What Affects Your Premium?
EPLI premiums are based on your specific employment risk profile:
Number of Employees
More employees means more exposure. Premiums typically increase with headcount, though not proportionally.
Industry
High-turnover industries (hospitality, retail, healthcare) and those with physical contact face higher premiums.
HR Practices
Documented policies, regular training, and proper termination procedures can reduce premiums significantly.
Claims History
Previous EPLI claims, EEOC complaints, or lawsuits substantially increase rates.
Turnover Rate
High employee turnover increases wrongful termination exposure and premiums.
Geographic Location
States with employee-friendly laws (California, New York) see higher claims and premiums.
Typical Range: Small businesses with 10-25 employees might pay $800-$3,000/year. Larger companies or those in high-risk industries can pay $5,000-$15,000+ annually. Your specific rate depends on your risk factors and coverage limits.
HR Best Practices That Reduce Risk
Good HR practices can prevent claims and lower your premiums:
Written Policies
Maintain a comprehensive employee handbook covering anti-discrimination, harassment, and termination procedures. Have employees sign acknowledgment forms.
Documentation
Document all performance issues, disciplinary actions, and termination decisions. Good records are your best defense against employment claims.
Consistent Enforcement
Apply policies uniformly to all employees. Inconsistent treatment is often cited as evidence of discrimination.
Regular Training
Provide harassment prevention and management training. Many insurers offer free or discounted training programs.
Proper Termination Process
Never fire in anger. Have HR involved, document the reasons, and consider having a witness present.
The Importance of Documentation
In employment lawsuits, documentation is everything. If a performance issue wasn't documented, it didn't happen—at least in the eyes of a jury. Keep detailed records of all employee interactions, performance reviews, disciplinary actions, and termination decisions. Many EPLI insurers provide free HR hotlines and document templates to help you build better records.
Get Your EPLI Quote
Protect your business from costly employment claims. One lawsuit can exceed what you'd pay in premiums for decades.
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