What Is EPLI—and Does Your Business Need It?

That’s where Employment Practices Liability Insurance (EPLI) comes in. This coverage protects your business from claims made by employees or job candidates over workplace-related issues—claims that can affect your finances, reputation, and ability to grow.

What Does EPLI Cover?

EPLI helps cover the cost of defending your business and paying damages in employment-related lawsuits. Claims may come from current employees, former employees, or even job applicants.

Here’s what an EPLI policy typically protects against:

• Wrongful termination
• Discrimination (race, gender, age, disability, etc.)
• Sexual harassment
• Retaliation or constructive discharge
• Defamation or emotional distress
• Invasion of privacy
• Workplace torts, like slander

Depending on your business and its structure, EPLI can be added to your directors and officers (D&O) liability coverage, especially if leadership is likely to be named in a claim.

Why Your Business Could Be at Risk

You might be surprised by how frequent—and costly—these claims are. Consider these facts:

• A private company is more likely to face an EPLI claim than a general liability claim
• Roughly 75% of litigation against corporations involves employment disputes
• 65% of employers who fire an employee will face a discrimination lawsuit
• The average cost to defend an EPLI claim is $150,000
• The median settlement is around $250,000

These aren’t just numbers—they represent real legal and financial risks that can impact businesses of all sizes.

Real-World Scenarios

Here are just a few examples of EPLI claims that led to significant settlements:

• Race and national origin discrimination: A group of employees at a tech company alleged unequal treatment and a hostile work environment. Settlement: $635,000 (salary increases, enhanced promotional activities).
• Sex discrimination class action: Eight employees sued over wage disparities and pregnancy leave practices. Settlement: $600,000, plus $5 million in legal fees.
• Age discrimination and retaliation: A senior regional attorney sued a securities dealer, claiming age discrimination and retaliation. He claimed he was unfairly terminated for advice he gave to a co-worker regarding his employment rights. Verdict: $443,000

These cases highlight how easily employment-related claims can arise—even from situations you may not anticipate.

Protect Your Business from the Inside Out

You work hard to create a fair and respectful workplace. However, even with good policies in place, you can still be held responsible for the actions of managers, coworkers, vendors, or customers. And with employment laws constantly evolving, it can be tough to stay ahead of every new regulation.

EPLI gives you a financial safety net, helping you cover legal costs and settlements if a claim does arise.

Contact your Leavitt Group Texas Select advisor today to learn more about EPLI and determine if it’s the right fit for your business.