Employment Practices Liability Insurance in Texas
EPLI insurance can help protect eligible businesses against certain employment-related claims, including allegations of discrimination, sexual harassment, retaliation or wrongful termination.
- ✓ Independent agency
- ✓ Multiple EPLI carriers
- ✓ Serving employers across Texas
When You Have Employees, Employment Practices Matter
Running a business means making decisions about hiring, managing, evaluating and sometimes terminating employees. Even when you believe a decision was appropriate, an employee or former employee may bring a claim.
Employment practices liability insurance, commonly called EPLI, is designed to provide coverage for certain claims arising from employment practices. Depending on the policy, coverage can address allegations such as discrimination, sexual harassment, retaliation and wrongful termination.
Coverage varies by insurer and policy and is subject to applicable terms, conditions, limits, exclusions and endorsements.
What Can EPLI Insurance Cover?
EPLI policies can address certain employment-related claims. The specific coverage depends on the policy.
Wrongful Termination
Coverage may apply to certain claims alleging that an employee was improperly fired.
Discrimination
EPLI may cover certain claims alleging discrimination in hiring, pay, promotion, discipline or firing.
Sexual Harassment
Certain policies cover eligible claims involving alleged workplace sexual harassment or a hostile work environment.
Retaliation
Many policies address certain claims alleging an employee was punished for complaining or reporting a concern.
Legal Defense
An EPLI policy may cover defense costs for certain covered claims, which can be substantial even when a claim is dismissed.
Third-Party Claims
Some policies can be endorsed to cover certain harassment or discrimination claims brought by customers or vendors.
Good Employers Can Still Face Employment Claims
Employment decisions aren’t always simple. A business may make a hiring decision, change someone’s responsibilities, conduct a performance review or end employment, and later face an allegation that the decision violated employment laws.
EPLI is designed to help businesses address certain financial risks from these claims. The goal isn’t to assume something will go wrong. It’s to understand the risk before it does.
A growing business terminates an employee after a performance dispute. The former employee later alleges the termination was discriminatory.
If the business has applicable EPLI coverage and the claim meets the policy requirements, the policy may help with covered defense costs or other covered amounts, subject to the policy’s terms, conditions, limits and exclusions.
Many federal anti-discrimination laws only apply once a business has 15 or more employees. But since September 1, 2021, Texas sexual harassment law (SB 45) applies to employers with just one employee, and to people acting directly in an employer’s interests, such as supervisors.
That means even very small Texas businesses can face a sexual harassment claim under state law, which is one reason EPLI is worth a conversation regardless of headcount.
Common Employment Practices Exposures
Employment-related risk can arise anywhere in the employee lifecycle.
Hiring Decisions
Recruiting, interviewing and hiring decisions can create exposure, especially as a business grows.
Performance Management
Evaluations, discipline and changes in responsibilities can lead to disputes.
Termination
Ending employment can lead to allegations of wrongful termination or retaliation.
Workplace Conduct
Allegations of harassment or discrimination can result in significant business expenses.
Employee Complaints
Internal complaints and disputes may develop into formal charges or lawsuits.
Growing Teams
Adding employees and managers makes employment practices more complex.
EPLI vs. General Liability vs. Workers’ Compensation
These coverages address different risks, and employment claims are generally not covered by a standard general liability policy.
| Coverage | Generally Addresses |
|---|---|
| EPLI | Certain employment-related claims such as discrimination, harassment, retaliation or wrongful termination. |
| General Liability | Certain third-party bodily injury, property damage and personal or advertising injury claims. |
| Workers’ Compensation | Work-related employee injuries and illnesses, subject to the workers’ compensation system and policy. |
What to Look for in an EPLI Policy
EPLI policies differ more than many business owners expect. When comparing quotes, we review:
- Whether the policy is claims-made, and its retroactive date
- Defense costs inside or outside the limit
- Retention (deductible) amount
- Wage-and-hour exclusions or sublimits
- Third-party coverage options
- Access to HR hotlines or legal resources
- Keep a written employee handbook with anti-harassment and anti-retaliation policies
- Train managers and supervisors on those policies
- Document performance issues and discipline consistently
- Give employees a clear way to report concerns
- Investigate complaints promptly and keep records
- Talk to us before a difficult termination, since many policies require prompt notice of potential claims
Who Should Consider EPLI Insurance?
Any business with employees can face employment-related exposures, although the level of risk varies.
Small Businesses
A smaller company can still face significant costs from a single employment dispute.
Growing Companies
Hiring more employees and managers introduces new employment practices exposures.
Restaurants & Retail
Higher turnover, hourly staff and customer interaction can increase employment claim frequency.
Businesses With HR Departments
Formal HR procedures help, but they don’t eliminate the possibility of a claim.
Multiple Locations
More teams and workplaces create additional management and employment considerations.
Professional Firms
Offices with salaried staff can face claims over promotions, pay and terminations.
Why Talk With Lavon Insurance?
Employment practices coverage is an important part of a broader commercial insurance program. We take the time to understand your business, your team and the risks you’re trying to manage.
Multiple Carriers
As an independent agency, we compare available EPLI options from multiple insurance companies.
Personal Service
Business insurance should come with a person who can help you understand your options.
Texas Businesses
We help Texas employers explore commercial insurance based on their individual needs.
EPLI Insurance FAQs
What is EPLI insurance?
Employment practices liability insurance, or EPLI, is designed to provide coverage for certain employment-related claims. Depending on the policy, this can include claims involving discrimination, sexual harassment, retaliation and wrongful termination.
What does EPLI insurance cover?
Coverage varies by policy, but EPLI can cover certain employment-related claims and the cost to defend them. Wage-and-hour claims are commonly excluded or sublimited, so review the policy carefully.
Does general liability insurance cover employment claims?
Generally, no. Standard general liability policies typically exclude employment-related practices. Don’t assume employment claims are covered without reviewing your policy language.
Does a small business need EPLI insurance?
It’s worth considering for any business with employees. In Texas, state sexual harassment law has applied to employers with one or more employees since September 2021, so even very small businesses can face claims.
Does EPLI cover wrongful termination?
Wrongful termination is one of the core employment practices that EPLI policies are designed to address. Actual coverage depends on the specific policy, including its terms, conditions, limits and exclusions.
How much EPLI insurance does a business need?
The appropriate limit depends on the number of employees, industry, locations, management structure, turnover and potential exposure. An insurance professional can help you evaluate options.
EPLI Is Part of a Larger Business Insurance Strategy
Employment practices are only one of the risks facing today’s businesses.
Workers’ Compensation
Coverage options for employee work-related injuries and illnesses.
Learn more →General Liability
Coverage for certain third-party bodily injury and property damage claims.
Learn more →Commercial Crime
Coverage options for employee theft, forgery and certain fraud losses.
Learn more →Professional Liability
Protection for certain claims involving professional services.
Learn more →Cyber Insurance
Coverage options for data breaches, including employee records.
Learn more →Commercial Umbrella
Additional liability limits above certain underlying policies.
Learn more →Protect Your Business. Protect Your People.
Employment-related claims can create financial and legal challenges. Let’s review your commercial insurance program and discuss whether EPLI makes sense for your business.
Insurance coverage varies by insurer and policy. Employment practices liability insurance may provide different coverage, limits, retentions, conditions and exclusions depending on the policy. This page is for general informational purposes, is not legal advice, and does not modify or replace the terms of an insurance policy. Coverage is subject to the applicable policy terms, conditions, limits, exclusions and endorsements.