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Employment Practices Liability

Employment Practices Liability Insurance (EPLI) provides coverage for claims made against you by employees or third parties alleging workplace-related issues such as discrimination, harassment, wrongful termination, or other violations of employee rights.

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Rob Ferrini

Program Manager/Broker

Stephen Vono

Partner / Retail Manager

Who Needs EPLI?

Every employer, regardless of size, should consider Employment Practices Liability Insurance. Over 60% of employee liability claims are filed against small employers, and you are more likely to be sued by an employee than experience a property loss—yet most employers wouldn’t consider going without property insurance.

Employment Practices Liability Insurance protects against legal expenses and damages related to wrongful employment practices like discrimination, harassment, and wrongful termination. One EPLI lawsuit could potentially bankrupt 50% of small businesses with under 100 employees.

While some carriers offer EPLI as an endorsement to your professional liability or business owners policy, these are often limited and may not provide adequate protection. A stand-alone EPLI policy offers comprehensive, affordable coverage, ensuring your business is fully protected.

Employment Practices Liability Coverage Details

Discrimination Claims

Coverage for claims of discrimination based on race, gender, age, disability, religion, or other protected characteristics.

Sexual Harassment

Protection against claims of sexual harassment, including verbal, physical, or other inappropriate workplace behaviors.

Retaliation

Coverage for claims alleging retaliation for reporting violations, participating in investigations, or exercising protected rights.

Wage and Hour Violations

Protection for claims related to unpaid overtime, minimum wage issues, or improper classification of employees under FLSA.

ADA Website Accessibility Claims

Coverage for lawsuits related to violations of the Americans with Disabilities Act (ADA) regarding website accessibility.

Defense Costs Outside the Limit of Liability

Coverage for legal defense costs separate from the policy limit, ensuring that defense expenses do not reduce the amount available for settlements or judgments.

Duty to Defend

USLI covers legal defer costs and provides skilled legal counsel, even for frivolous claims, without eroding policy limits.

Professions we insure.

“McGowan Professional has been one of the easiest companies to work with. This year Fruci & Associates, PS acquired a subsidiary firm that performs PCAOB audits and attest services, which is work outside of the scope of our current accountants professional liability coverage.

Accountants & CPAs

Bookkeepers

Investment Advisors

Lawyers

Frequently asked about Employment Practices Liability

Why should I consider a stand-alone EPLI policy?

A stand-alone Employment Practices Liability Insurance (EPLI) policy is an affordable and comprehensive option that provides full coverage for your business, offering the protection needed to handle employment-related claims without the limitations found in endorsements or BOP coverage.

Why is EPLI essential for protecting against sexual harassment claims?

Following the #MeToo movement, awareness of workplace sexual harassment has grown. EPLI provides protection against claims of inappropriate conduct, unwelcome advances, and hostile work environments. McGowan policyholders also gain access to tools and training to prevent such claims.

Why has there been an increase in EEOC and state charges?

In 2022, charges filed with the EEOC increased by 16%, totaling 73,485 claims. Small businesses are more likely to face an EPLI claim than a general liability or property loss, and the trend of growing employee awareness, an aging workforce, and aggressive plaintiffs’ actions suggests the risk of employment lawsuits will continue to rise.

Why are wage and hour violations a growing concern?

Wage and hour claims have surged by 450% over the last 15 years. Typically, coverage for these claims is limited to defense costs, requiring businesses to pay back any owed wages out of pocket. USLI offers a $100,000 defense and indemnity sublimit for Fair Labor Standards Act (FLSA) violations.

What is Comprehensive Duty to Defend coverage?

EPLI policies with a Duty to Defend clause offer legal protection for various employment-related claims. This coverage helps businesses navigate the complex employment law landscape, ensuring skilled legal counsel is available, which often leads to quicker and more efficient claim resolutions

What are the costs associated with defending employment lawsuits?

Defending employment lawsuits can be expensive, with costs upwards of $75,000 even for frivolous claims. Lawsuits with merit or those that go to trial can be even more costly. Settlements have also been trending toward record levels, especially in employee-friendly jurisdictions like California, New York, and Washington.

What are defense costs outside the limit of liability?

Our EPLI policy includes defense costs outside the limit of liability, meaning legal expenses do not reduce the coverage limit for settlements or judgments. This ensures comprehensive protection, especially for businesses with fewer than 200 employees.

Does my Business Owners Policy (BOP) cover Employment Practices Liability?

While your Business Owners Policy (BOP) may reference Employment Practices Liability, the coverage provided is typically very limited and may not fully protect your business in the event of an employment-related claim.

Do I already have coverage for Employment Practices Liability?

Some insurance carriers offer Employment Practices Liability (EPLI) coverage as an endorsement to your professional liability insurance. However, we recommend caution when relying on these endorsements, as they often do not provide adequate protection. Additionally, a claim under your EPLI could affect your professional liability record.