When You Have Employees, Employment Practices Matter
Running a business means making decisions about hiring, managing, evaluating and sometimes terminating employees. Even when an employer believes a decision was appropriate, an employee or former employee may bring an employment-related 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 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 available depends on the policy.
Wrongful Termination
Coverage may apply to certain claims alleging that an employee was improperly terminated.
Workplace Discrimination
EPLI may provide coverage for certain claims alleging discrimination in employment practices.
Sexual Harassment
Certain EPLI policies provide coverage for eligible claims involving alleged workplace sexual harassment.
Employment Practices
Depending on the policy, coverage may extend to additional employment-related allegations and workplace practices.
Legal Defense
An EPLI policy may provide defense-related coverage for certain covered claims, subject to the policy’s terms and limits.
Other Employment Claims
Some policies may provide additional employment-practices coverage beyond the most commonly discussed claims.
Employment Practices Risk
Good Employers Can Still Face Employment Claims
Employment decisions aren’t always simple. A business may make a hiring decision, change an employee’s responsibilities, conduct a performance review or terminate employment and later face an allegation that the decision violated employment laws or policies.
EPLI is designed to help businesses address certain financial risks associated with these types of employment-related claims.
The goal isn’t to assume something will go wrong. It’s to understand the risk before it does.
A Simple Example
Imagine 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 address covered defense costs or other covered amounts, subject to the policy’s terms, conditions, limits and exclusions.
Common Employment Practices Exposures
Employment-related risk can arise throughout the employee lifecycle.
Hiring Decisions
Hiring and recruiting decisions can create employment-related exposure, particularly as businesses grow.
Performance Management
Employee evaluations, disciplinary actions and changes in responsibilities can create potential disputes.
Employee Termination
Terminating an employee can create allegations involving wrongful termination or other employment practices.
Workplace Conduct
Allegations involving harassment or discrimination can result in significant business expenses.
Employee Complaints
Complaints and disputes may develop into formal employment-related claims.
Growing Teams
As a business adds employees and managers, its employment practices become more complex.
Who Should Consider EPLI Insurance?
Any business with employees can face employment-related exposures, although the level of risk varies by business.
Small Businesses
A smaller company may still face significant costs from an employment-related dispute.
Growing Companies
Hiring additional employees and managers can introduce new employment practices exposures.
Businesses With HR Departments
Having formal HR procedures doesn’t eliminate the possibility of an employment-related claim.
Businesses With Multiple Locations
Larger teams and multiple workplaces can create additional management and employment-practices considerations.
EPLI vs. General Liability Insurance
These coverages address different types of business risks.
EPLI Is Part of a Larger Business Insurance Strategy
Employment practices are only one part of the risks facing today’s businesses.
General Liability
Explore coverage for certain third-party liability exposures.
Cyber Insurance
Learn about insurance options for certain cyber-related risks.
Professional Liability
Explore protection for certain claims involving professional services.
Commercial Umbrella
Learn about additional liability protection above certain underlying policies.
Why Talk With Lavon Insurance?
Employment practices coverage can be an important part of a broader commercial insurance program. We take the time to understand your business, your employees and the risks you are trying to manage.
Multiple Carriers
As an independent agency, we can compare available options from multiple insurance companies.
Personal Service
We believe business insurance should come with a person who can help you understand your options.
Texas Businesses
We help Texas businesses explore commercial insurance solutions 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 and wrongful termination.
What does EPLI insurance cover?
Coverage varies by policy, but EPLI can provide coverage for certain employment-related claims such as allegations of discrimination, sexual harassment and wrongful termination. Other employment practices may also be covered depending on the policy.
Does general liability insurance cover employment claims?
General liability and EPLI address different types of risks. Businesses should not assume that employment-related claims are covered by a standard general liability policy. The applicable policy language determines coverage.
Does a small business need EPLI insurance?
EPLI may be worth considering for businesses with employees, regardless of size. The appropriate coverage depends on the business’s workforce, operations, exposures and available insurance options.
Does EPLI cover wrongful termination?
Texas Department of Insurance identifies wrongful termination as one of the employment practices covered by EPLI policies. 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 factors such as the number of employees, industry, locations, management structure and potential exposure. An insurance professional can help you evaluate available options.
Protect Your Business. Protect Your People.
Employment-related claims can create financial and legal challenges for a business. Let’s review your commercial insurance program and discuss whether EPLI coverage makes sense for your business.
Get an EPLI QuoteInsurance coverage varies by insurer and policy. Employment Practices Liability Insurance may provide different coverage, limits, deductibles, conditions and exclusions depending on the policy. This page is for general informational purposes 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.