Employment Practices Liability Insurance (EPLI)
What is Employment Practices Liability Insurance?
Employment Practices Liability Insurance (EPLI) helps protect companies from claims made by current, former or prospective employees, alleging wrongful termination, failure to promote, negligent evaluation, discrimination, retaliation, sexual harassment and more. In an increasingly litigious world, even companies that are diligent in addressing employee complaints and fostering a healthy work environment can find themselves in a dispute over some of these issues. EPLI can help protect businesses from the costs of defending a lawsuit in court, as well as the costs of judgments and settlements.
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Understanding Common EPLI Claims
Employment-related claims can disrupt even well-managed organizations. Mid-sized and large companies across industries face complex employment exposures that require disciplined procedures and thoughtful risk planning. Clear policies and appropriate coverage help strengthen business confidence when allegations arise. Employment Practices Liability Insurance is designed to help address claims when they are made.
These claims frequently involve complex legal and emotional issues and may include:
- Discrimination: Allegations of adverse treatment based on age, race, gender, religion or other legally protected characteristics.
- Harassment: Claims related to unwelcome conduct, hostile work environments or quid pro quo propositions.
- Wrongful Termination: Allegations that an employee was fired in violation of their legal rights or public policy.
- Retaliation: Claims that an employee suffered adverse action, such as demotion or termination, for lawfully reporting misconduct or participating in an investigation.
Managing these risks effectively is a key component of a forward-looking business strategy.
Why is Employment Practices Liability Insurance important?
Once viewed as a discretionary coverage, Employment Practices Liability Insurance is now widely seen as essential for businesses resilience, and for good reason:
Discrimination claims are up significantly since 2020.1
Settlements to workers in class action lawsuits against employers reached nearly $2 billion in 2022.2
Approximately 70% of all businesses have been involved in employment litigation over the past five years.3
Employees win nearly 60% of retaliation and wrongful termination cases in court.4
These are just a few examples of how employee claims can affect a business of any size and in any industry, potentially damaging its financial standing and reputation. Litigation can be prolonged, costly, and emotionally charged with hefty attorneys’ fees and potential "sizeable jury verdicts" awards. Even if a company is exonerated in court, a company’s brand and bottom line can be hurt in a lasting manner.
Why choose Zurich for EPL Insurance?
Our flexible and customizable coverage has been developed with deep knowledge of employment laws, as well as current and evolving exposures, to help businesses manage the risks of employee-related litigation. Zurich’s EPLI policy can help address claims related to:
- Harassment, including sexual harassment, from senior managers, supervisors, co-workers or even non-employees
- Discrimination, which includes unfair treatment based on religion, age, ethnicity, gender, disability, skin color, sexual orientation or race
- Wrongful termination
- Retaliation, including retaliation against whistleblowers reporting workplace violations
- Breach of an employment contract
- Pay equity disputes
- Negligent evaluation
- Failure to hire or promote
- Wrongful discipline
- Deprivation of a career opportunity
We can offer broad employment practices liability coverage for companies, their executives and employees for discrimination lawsuits and other allegations of employment-related violations. Our EPLI coverage includes:
- Broad definition of “employee”
- Third-party coverage available
- Broad definition of Employment Practices Wrongful Acts
- Worldwide territory coverage (to the extend legally permissible)
- Additional enhancements available via endorsement
Building a Resilient and Confident Workplace
Effective risk management goes beyond insurance. It strengthens the environment where your employees and your business can perform at their best. A strong workplace culture, built on clear policies and mutual respect, is your first and most effective line of defense against employment-related claims. It’s a direct reflection of your company’s values and its commitment to a brighter future.
Zurich works with your business to support this goal. We provide resources designed to help you strengthen your employment practices and foster a positive workplace. While insurance provides a crucial backstop for when claims do occur, our objective is to support the development of strong internal practices and governance structures. By taking proactive steps to refine your procedures and educate your team, you are not just managing risk—you are investing in your company’s long-term stability and success.
Legal guidance and risk services and for employers
Reducing potential impacts of employee claims should start before a claim is made, so in addition to benefitting from our insurance coverages, EPLI customers can take advantage of risk services that may help them better manage their workforce and help reduce employment-related exposures.
Jackson Lewis EPLI Prevent & Protect Portal and hotline
This portal provides Zurich customers with a comprehensive package of risk management products and services designed by the attorneys at Jackson Lewis. The portal gives users access to:
- Up-to-date information on workplace law topics
- Interactive executive, manager, and employee training (users can also set up interactive or live training through the portal)
- A hotline where the call center can help answer employment-related questions
- Free sample of human resource policies including employee handbook templates
- Labor and employment library of on-demand podcasts and webinars
- Employment practices checklists to assist in evaluating the approach to important employment issues
Portal access is free, with some services and capabilities available at additional cost.
Key Industries Requiring EPLI Protection
While every business with employees faces some level of employment liability risk, certain industries experience a higher frequency of claims due to the nature of their operations and workforce dynamics. Mid-sized and large corporations in these sectors often require tailored approaches to manage their unique exposures.
Industries with heightened EPLI considerations include:
- Retail and Hospitality: High employee turnover and public-facing roles can increase the risk of harassment and discrimination claims.
- Construction: This industry is focusing on addressing gender-based discrimination, harassment issues and other workplace torts.
- Technology: The technology sector presents heightened EPLI risk due to rapid workforce expansion and contraction, frequent restructurings and layoffs, heavy use of AI and automation in hiring and performance decisions, and heightened regulatory and employee scrutiny—all of which increase the likelihood of discrimination, retaliation, and wrongful termination claims.
Understanding your industry’s specific risk profile is the first step toward developing an effective management strategy.
FAQs
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Hood, David. “Lawsuits Challenge Corporate Diversity Pledges After Floyd.” Bloomberg Law. 7 April 2023.
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Bennett, Jennifer, et al. “Workplace Class Settlement Values, Certifications Soared in 2022.” Bloomberg Law. 6 January 2023.
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Zipdo. “Essential Employee Lawsuit Statistics In 2023.” 9 June 2023.
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Ibid.