Employment Practices Liability Insurance (EPLI)

Employment Practices Liability Insurance (EPLI)  


Employment Practices Liability Insurance provides protection for your entity from claims / lawsuits alleging sexual harassment, discrimination, wrongful termination, and other defined employment-related allegations.

Employment Practices Liability Insurance, often referred to as EPLI coverage, has evolved over the past decade or two. More employers are aware of its importance simply through high-profile court cases that have awarded millions of dollars to employees.


It is important for an employer to note employment laws such as:

  • Equal Pay Act of 1963
  • Title VII of the Civil Rights Act of 1964
  • Civil Rights Act of 1966
  • Age Discrimination in Employment Act of 1967
  • Equal Employment Opportunity Act of 1972
  • Bankruptcy Code 
  • Immigration Reform & Control Act of 1986
  • Americans with Disabilities Act of 1990
  • Civil Rights Act of 1991


One key provision of 1991 Act was the requirement of a jury trial for most alleged types of work-related discrimination, if desired by the plaintiff employee. This set the tone for the expansion of Employment Practices Liability Insurance.



Types of EPLI available

In the 1990s, several insurance companies developed Employment Practices Liability insurance policies as a stand-alone product or by endorsement to a Directors & Officers policy. Simply adding the EPLI coverage to the D&O policy proved to be fairly ineffective. EPLI is more "claims frequency" oriented while D&O is more "severity" oriented with less claims frequency.


Both exposures are subject to the policy aggregate limit. A D&O claim can exhaust the policy's aggregate limit, which would leave you without any available coverage for EPLI exposure. Also insurance carriers monitor EPLI claim experience which can jeopardize D&O renewal when both exposures are covered on the same policy.


For above reasons, insurance carriers can provide a stand-alone EPLI Insurance Policy to your firm.


Examples of large EPLI settlements

  • $157 million awarded to 800 female employees of a large domestic insurance company for "failure to promote" and "opportunity denial"
  • $134 million awarded to customers/patrons of a family restaurant chain for "race discrimination"
  • $107 million awarded to 20,000 female employees of a convenience store chain for "sex discrimination"
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