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Employment Practices Liability Insurance (EPLI) protects companies against a
broad spectrum of employment-related claims such as sexual harassment, workplace discrimination,
and breach of contract. The passing of the Civil Rights Act of 1991 marked a dramatic turn in
employers' liability and, coupled with far-reaching external events, added to the minefield of
employment-related exposures facing today's business entity. Due to the rise in frequency and
severity of such claims, EPLI coverage helps to shield companies from crippling compensatory damages
in cases of alleged employment practices misconduct.
Employment Practices Liability Insurance coverage helps businesses effectively control
legal and loss costs. This is of particular importance for small to medium-sized companies,
companies that potentially could not recover from a lengthy and costly litigation process.
Additionally, EPL insurance heightens a company's awareness of its accountability, which in
turn can enhance its compliance with federal and state employment laws and assist the human
resources department in maintaining positive employee relations.
Employment Practices Liability Insurance can be attributed to a wide range of
workplace practices and policies found by courts or agencies to be wrongful. "Wrongful" means
that the practice either violates an employee's common-law rights, or it fails to comply with
employment-related statutes and regulations. While EPL exposure is tied principally to an employer's
hiring and termination practices, it can also arise in connection with many of the workplace
situations that modern supervisors must regularly grapple with, such as substance abuse,
family-related leaves of absence, and sexually hostile environments.
Personnel policies and employment practices are subject to more scrutiny than ever before.
Simply following good personnel practices does not insulate a business from liability.
Businesses must defend themselves against even groundless allegations, a process that is
time consuming, emotionally draining, and expensive.
Employment Practices Liability Insurance provides coverage for claims that allege:
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Wrongful termination
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Sexual harassment
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Discrimination based on race, color, religion,
national origin, age, or sex
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Discrimination due to pregnancy
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Discrimination of individuals with
disabilities or life-threatening illnesses
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Failure to employ or promote
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Wrongful discipline
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Wrongful deprivation of career opportunity
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Breach of oral and written employment contracts
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Creation of a hostile work environment
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