The realm of employment law is complex, and ensuring that you navigate it correctly can feel like a full time job. With so much to pay attention to, it is no wonder that many businesses will find themselves in the midst of a mistake or error in how employees have been treated. You can protect your business against possible financial fallout as a result of such mistakes using employment practices liability insurance.
What Employment Practices Liability Insurance Means
In a nutshell, employment practices liability insurance is a specific type of insurance that covers claims made by employees at work when they believe that their rights as workers have been violated. Even if this violation occurred unintentionally, it is the worker’s right to pursue legal action, which could have long-term financial repercussions for your business. Employment practices liability insurance can defend you against these claims, by covering the cost of your legal defense or settlements paid as a result of the case.
Should I Choose Standalone Or Endorsement Coverage?
Securing coverage through an employment practices liability insurance policy may vary depending on the existing policies that you have and which insurer you work with. Some policies allow you to add coverage in this area as an endorsement, while others require that you open a separate policy.
Areas Of Coverage Available In An Atlas Insurance Agency, A Marsh Agency LLC Company Policy
Most employment practices liability insurance will cover a wide range of potential legal areas, such as discrimination, harassment and infliction of emotional or mental distress. However, you can also be covered for allegations of wrongful termination of an employee, depriving employees of career opportunities or promotions and even breaching your employment contract with a worker. There is also coverage available for liability claims brought by nonemployees, such as customers, clients, and vendors, for allegations against an employee for harassment or discrimination.
The exact coverage that you need will be based upon how many employees you have, the field in which you work, whether you have encountered issues in the past and which areas the insurer believes are at the highest risk in your business. You do not need to make this determination all on your own.
Secure Employment Practices Liability Insurance From The Specialists
Ready to learn more about employment practices liability insurance or secure a policy to protect your business? Reach out to Atlas Insurance Agency, A Marsh Agency LLC Company by phone at (808) 400-6680 or request a quote online to learn more. We offer comprehensive policies customized to suit your needs.
Frequently Asked Questions About Employment Practices Liability Insurance
EPLI covers claims made by employees, former employees, and job applicants alleging that their workplace rights were violated. Common covered claims include discrimination based on race, gender, age, religion, disability, or national origin, sexual harassment, wrongful termination, retaliation, failure to promote, breach of employment contract, and infliction of emotional distress. Many policies also extend to third-party claims brought by customers, clients, or vendors alleging harassment or discrimination by an employee.
Any business with employees has EPLI exposure, regardless of size or industry. Small businesses often assume they are too small to be sued, but the opposite is true. Smaller employers face proportionally higher risk because they tend to have fewer HR resources and less formal documentation. EPLI is especially important for industries with high turnover, dense customer interaction, or workforces with mixed seniority levels, including hospitality, retail, restaurants, healthcare, professional services, and construction.
No. General liability covers third-party bodily injury, property damage, and personal injury claims that arise from business operations, but it specifically excludes employment-related claims. EPLI is the only policy designed to cover discrimination, harassment, wrongful termination, and other workplace conduct claims. Without EPLI, the cost of legal defense and any settlement or judgment falls entirely on the business.
Both options exist, and the right choice depends on your existing coverage, business size, and risk exposure. Smaller businesses with limited employee counts sometimes add EPLI as an endorsement to a Business Owner’s Policy or management liability package, which can be more affordable but typically comes with lower limits and narrower coverage. Larger businesses or those in higher-risk industries usually benefit from a standalone EPLI policy with broader terms, higher limits, and more flexibility around defense counsel.
EPLI premiums vary based on employee headcount, industry, location, claims history, payroll, hiring and termination practices, and the coverage limits selected. Businesses with documented HR policies, employee handbooks, regular training, and clean claims history typically receive better rates. Atlas reviews your workforce profile, employment practices, and contract requirements to recommend appropriate limits and identify any risk control steps that can lower your premium.
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