What is EPLI Insurance?
Employment Practices Liability Insurance (EPLI) helps protect businesses from claims made by employees related to employment practices. These claims can include allegations of discrimination, wrongful termination, harassment, or other violations of employee rights. EPLI is designed to cover legal defense costs and potential settlements or judgments resulting from such claims.
Who Needs It
EPLI is important for businesses of all sizes. Whether you have one employee or hundreds, your business could be at risk for employment-related lawsuits. Companies with human resources departments, frequent hiring activity, or a history of employment claims may find this coverage especially critical.
- Small businesses with limited HR resources
- Mid-sized companies with growing teams
- Large organizations with complex hiring and firing processes
What It Typically Covers
EPLI policies generally cover a range of employment-related claims, including:
- Wrongful termination
- Discrimination (age, race, gender, etc.)
- Sexual harassment
- Retaliation
- Failure to promote or hire fairly
- Mismanagement of employee benefits
Common Exclusions and Limitations
While EPLI offers broad coverage, there are some common exclusions. These may vary by insurer, but often include:
- Criminal acts or intentional wrongdoing
- Workers’ compensation claims
- Unpaid wages or overtime disputes
- Claims related to independent contractors
Factors That Influence Cost
The cost of EPLI coverage depends on several factors, including:
- Number of employees
- History of prior claims
- Industry risk level
- Company policies and HR practices
- Coverage limits and deductibles
Proof of Insurance & Compliance
Some clients, partners, or government contracts may require proof of EPLI coverage as part of doing business. Requirements vary by state, so it’s important to consult with an insurance professional familiar with your location. A certificate of insurance (COI) is typically used to show proof of coverage.
How to Get a Quote
Getting EPLI coverage starts with a quote. Our team can help you find the right policy for your business needs. Get a quote today.
Frequently Asked Questions
Does general liability insurance cover employment-related claims?
No, general liability policies typically do not cover claims related to employment practices. EPLI is a separate policy designed to offer that protection.
Is EPLI required by law?
No, EPLI is not legally required, but it’s strongly recommended for businesses that employ staff. It can offer financial protection against costly legal claims.
Can EPLI cover claims from former employees?
Yes, EPLI often covers claims made by former employees, provided the claim arises from actions that occurred during their employment and the policy was in force at the time.
Does EPLI cover independent contractors?
Most EPLI policies do not cover independent contractors, but some insurers may offer endorsements to include them. Check with your provider for specific terms.
What’s the difference between EPLI and workers’ compensation?
Workers’ compensation covers job-related injuries or illnesses, while EPLI covers legal claims related to employment practices like discrimination or harassment.
Still have questions? Talk to a local insurance expert.