What to Know About Employment Practices Liability Insurance Coverage

What to Know About Employment Practices Liability Insurance Coverage

At CAV Insurance, we want our clients to be up to date on trends that we are seeing in the industry. Industry-wide there has been an uptick in claims for Employment Practice Liability claims.

What is Employment Practice Liability Insurance (EPLI)?

It’s an insurance policy that protects business owners from claims brought against them by their employees. Provides coverage for an accusation like:

  • Discrimination (based on sex, race, age or disability, for example)
  • Wrongful termination
  • Harassment
  • Other employment-related issues, such as failure to promote.


For example:

  • Subcontractors involved in the construction of a house managed by the client filed several complaints alleging discrimination and harassment. A state agency issued a $128,000 punitive damages award, which is not expected to hold up on the appeal of the entire decision. $65,000 has been paid in defense costs and settlement efforts.
  • A former employee filed a disability and race discrimination EEOC charge. The charge was filed after the insured terminated the employee for poor performance three days after the employee requested a medical leave. Due to serious timing issues and a lack of documentation relating to the alleged poor performance, the matter settled for $42,500, with an additional $13,000 in defense costs.

These types of claims are now just as crippling as a physical damage or general liability claim is to your business. 81% of small business claims settle for an average of $22,400 to $40,500. Even if there is no validity to the accusations that are being made you as the business owner will still have to defend your case.


We often hear from clients that I only have 2 employees I do not need the coverage, or my employees have worked for me for a long time. It does not matter, as a business owner you are still vulnerable.


On an average a $500,000 EPLI policy costs around $125 – $210 a month.  Far less than attorney fees and legal settlements.

If you would like a quote for EPLI coverage please let us know.

All we will need to know:

  • Payroll:
  • Sales:
  • Number of full-time employees
  • Number of part-time employees


Contact the professionals at CAV Insurance for more information about EPLI coverage.