Why your company needs EPLI
By Kevin DiPetrillo, Partner, PointeNorth Insurance Group
We’re about 30 years into insurance companies offering Employment Practices Liability Insurance (EPLI), and I still frequently walk into established companies who have never heard of it and are completely exposed. It shouldn’t surprise me anymore, but it happened several times recently, and it still drops my jaw every time.
Very few company founders or executives started their pursuit realizing how much time they would spend on managing people and legal responsibilities in their business. Even fewer received any kind of formal training to prepare them for the role. As a result, even those companies with strong values and thoughtful managers can make mistakes and face allegations around employment practices like wrongful or discriminatory hiring, discipline, promotion, pay, or termination along with other violations of labor law. Sometimes, when I’m meeting with a business that falls under the 50-employee threshold, the business owner believes they’re not subject to employment law, but they’re wrong. It doesn’t matter if you have two employees or 2,000: your business has an exposure.
Employment Practices Liability Insurance is designed to help protect a business when an employee, former employee, or job applicant claims they were treated unfairly.
Why EPLI matters for every business
One of the biggest misconceptions in business insurance is that general liability or workers’ compensation will cover employee lawsuits. Usually, they do not. EPLI fills that gap by helping with the cost of defending and resolving employment-related claims. For many businesses, the value of EPLI starts with legal defense alone, which can average $75,000 for pre-trial cases and $150,000 or more for cases that go to trial. That’s before you get to the $75,000 of average settlement costs for discrimination or $250,000 for harassment.
That’s okay. It won’t happen to you, right? Certainly not under the current business-friendly administration. The Equal Opportunity Employment Council (EEOC) recently reported a record-breaking $528 million in pre-litigation recoveries in 2025. Both the quantity and severity of EEOC actions increased year over year. This is just the Federal watchdog and doesn’t even account for private legal action against employers. In practice, that means businesses of all sizes face a real possibility of being pulled into a dispute, even when leadership believes it acted appropriately.
It’s not just employee on employee behavior that business owners need to worry about. Employers can be sued when employees harass or discriminate against people outside of the organization too. One of the worst claims I’ve seen came from an employee who gathered the cell phone numbers of attractive customers, then sexually harassed them.
Common claims EPLI can help address:
- Wrongful termination or wrongful discipline
- Discrimination based on protected characteristics
- Harassment, including sexual harassment
- Retaliation after an employee raises a concern or complaint
- Failure to hire, promote, or fairly evaluate an employee
- Defamation, invasion of privacy, or certain employment-related misrepresentation claims
These allegations can disrupt more than a balance sheet. They can pull owners and managers away from running the business, hurt morale, create reputational risk, and lead to long stretches of uncertainty. EPLI helps businesses respond with resources and financial support at a time when pressure is usually high.
What EPLI typically covers
While policy terms vary by insurer, EPLI often helps cover attorney fees, court costs, settlements, and judgments tied to covered employment-related claims. Some policies can add coverage for third-party claims and Wage-and-Hour disputes. Many policies also include access to HR resources through an online portal, such as employee handbook support and training tools. Some also include Employment Law hotlines that can help employers discuss a situation and reduce risk before a dispute grows into a claim. Some General Liability policies include a nominal amount of EPLI, but the breadth of that coverage is usually limited, and the coverage limit is far too low to be effective.
Employment Practices Liability Insurance policies are not uniform in the marketplace. You should work with an informed insurance broker and review definitions, exclusions, deductibles, and third-party coverage carefully.
Final thoughts
No employer expects to face an employment claim, but every employer faces the possibility. That is why EPLI has become an important part of a sound business insurance strategy. It helps protect finances, supports a faster response when allegations arise, and gives business owners a set of tools to use as they build and manage their teams. In short, if a business has employees, EPLI deserves serious consideration.
KEVIN DIPETRILLO is a Partner at PointeNorth Insurance Group. With a degree in Risk Management from The University of Georgia, he has been helping businesses and High Net Worth households with their insurance needs for 25 years. Visit pointenorthins.com to see how the company can serve your needs.
