Policy Types & Coverage

Employment Practices Liability (EPLI)

Employment practices liability insurance (EPLI) protects businesses against claims brought by current, former, or prospective employees alleging wrongful employment practices such as discrimination, wrongful termination, sexual harassment, retaliation, or wage-and-hour violations. EPLI is a claims-made policy, meaning it responds to claims first reported during the policy period, and it covers both legal defense costs and any resulting settlements or judgments.

Why EPLI Matters for Independent Agents

Employment-related lawsuits are one of the fastest-growing areas of commercial litigation in the United States. The EEOC received 88,531 new charges of discrimination in fiscal year 2024, and that number doesn't account for the thousands of claims filed directly in state courts or through state agencies. The average out-of-court settlement is approximately $75,000, while jury verdicts average $250,000 — and defense costs alone can add $120,000 or more. These figures are enough to cripple a small business that lacks coverage.

For independent agents, EPLI represents both a coverage gap and a cross-sell opportunity. Most business owners don't realize that general liability insurance does not cover employment-related claims. A client with a standard BOP or GL policy who fires a bookkeeper and gets hit with a wrongful termination suit has zero coverage unless they've purchased EPLI separately. This is the kind of gap that damages client relationships — and the kind of conversation that positions agents as trusted advisors when they bring it up proactively.

EPLI is especially relevant for businesses in the 10-100 employee range. Companies with fewer than 10 employees often fall below the threshold for federal employment laws like Title VII, though state laws may still apply. Larger companies typically have in-house counsel and HR departments that mitigate risk. But the mid-size business — a 30-person accounting firm, a 50-employee restaurant group, a construction company with 75 workers — is squarely in the crosshairs for employment claims and usually has no legal team to handle them.

How EPLI Works

EPLI policies cover a broad range of employment-related allegations:

Carriers like Hartford, Hiscox, and biBERK offer EPLI as either a standalone policy or an endorsement added to a BOP or commercial package. Standalone policies are more common for larger accounts that need higher limits, while endorsement-based EPLI works well for small businesses. Typical limits range from $100,000 to $5 million, with deductibles starting around $2,500 for small accounts.

Because EPLI is written on a claims-made basis, agents need to pay close attention to retroactive dates and prior acts coverage when moving a client between carriers. If a client switches from Progressive to Hartford, the new policy's retroactive date must cover the original inception date — otherwise there's a gap where prior employment practices aren't covered. This is a common mistake that new agents make during remarketing, and it can have devastating consequences.

The underwriting process for EPLI involves questions about the employer's HR practices, employee handbook, hiring and termination procedures, and prior claims history. Carriers want to see that the business has written policies on harassment, discrimination, and complaint procedures. Businesses without an employee handbook typically face higher premiums or may be declined altogether.

When completing an EPLI submission, agents should gather the client's employee count by state, annual payroll, industry type, prior employment claims (going back five years), and information about existing HR policies. For carriers that use ACORD forms, the ACORD 125 provides base information, but most EPLI submissions require a supplemental application specific to the carrier.

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