What Is Employment Practices Liability Insurance (EPLI)?
Employment Practices Liability Insurance (EPLI) protects businesses from claims related to employment practices. These can include allegations of discrimination, harassment, wrongful termination, or retaliation.
Many business owners assume they only need EPLI if they have employees. However, EPLI also provides third-party coverage, protecting against claims from customers, vendors, or independent contractors. That means even landlords and small businesses without employees can face exposure.
If a claim arises—whether valid or not—EPLI covers legal defense costs and potential settlements. With employment-related lawsuits on the rise, this coverage has become essential for businesses of all sizes.
Who Needs EPLI Coverage? (Hint: Almost Everyone)
Many business owners believe EPLI is only necessary for large corporations with human resources departments. However, small businesses are often the most vulnerable, as they may lack formal HR policies or legal teams.
EPLI is valuable for:
- Businesses with Employees – Protects against wrongful termination, discrimination, harassment, and retaliation claims.
- Landlords and Property Owners – Covers tenant discrimination or wrongful eviction claims.
- Business Owners Without Employees – Third-party EPLI protects against claims from customers, vendors, or independent contractors.
Even if you run a family business or work with a close-knit team, disputes can still arise.
How EPLI Protects You: 1st-Party vs. 3rd-Party Coverage
EPLI offers two types of protection:
1st-Party Coverage (Employee Claims)
Protects against lawsuits from employees alleging:
- Wrongful termination
- Discrimination based on age, gender, race, disability, etc.
- Sexual harassment
- Retaliation for whistleblowing or complaints
- Failure to promote
3rd-Party Coverage (Customer, Vendor, or Tenant Claims)
Covers claims made by non-employees, including:
- A customer alleging discrimination based on race or disability
- A vendor claiming harassment or a hostile work environment
- A tenant accusing a landlord of wrongful eviction
Example: A landlord denies an apartment rental due to financial concerns, but the applicant believes it was due to race or disability. The applicant sues for discrimination. EPLI with third-party coverage helps cover defense costs and potential damages.
How EPLI Is Available: Businessowners Policy vs. Standalone Policy
Many Businessowners Policies (BOPs) or commercial insurance packages offer a small amount of EPLI coverage as an add-on. However, these often have low limits and limited coverage.
- BOP Add-On EPLI:
- Included in some business policies
- Coverage limits are typically low ($10,000–$50,000)
- May not include third-party coverage
- Standalone EPLI Policy:
- Higher coverage limits available ($250,000–$1,000,000+)
- Broader definitions of wrongful acts
- Can include defense outside of limits (meaning legal fees don’t erode the total payout)
If you want comprehensive protection, a standalone EPLI policy is the better choice.
Why EPLI Is More Important Than Ever
- Employment-related lawsuits are rising: In recent years, claims of workplace discrimination, harassment, and wrongful termination have surged.
- Defense costs alone can be devastating: Even frivolous lawsuits require legal representation. EPLI covers defense costs, settlements, and judgments.
- Even the best-run businesses face risks: A single lawsuit—regardless of merit—can financially cripple a small business.
- Don’t wait until you’re sued. Protect your business now.
Get a personalized EPLI quote today.
External Resources for More Insights
- Equal Employment Opportunity Commission (EEOC) – Learn about common employment discrimination claims.
- Insurance Information Institute: EPLI Guide – Understand EPLI coverage in more detail.
Frequently Asked Questions About EPLI
1. What does EPLI cover?
EPLI covers claims of discrimination, harassment, wrongful termination, retaliation, and other employment-related issues. It includes legal defense and potential settlement costs.
2. Does EPLI only apply to large businesses?
No! Small businesses often need EPLI even more because they lack in-house legal teams or formal HR policies.
3. Why do landlords need EPLI?
Landlords face tenant discrimination claims, wrongful eviction allegations, and harassment accusations. EPLI with third-party coverage helps protect against these lawsuits.
4. Can I get EPLI through my Businessowners Policy?
Some BOPs include limited EPLI coverage, but it is often minimal. A standalone policy offers broader protection with higher limits.
5. Will EPLI cover a claim if I did nothing wrong?
Yes! Even baseless claims require legal defense, which can be expensive. EPLI helps cover those costs.
Why Choose McGroarty & Bradburn Insurance for EPLI?
- Access to Multiple Carriers – We compare options to find the best coverage and price.
- Custom EPLI Solutions – We tailor policies to fit your unique business needs.
- Expert Guidance – We help you understand coverage options and risk exposure.
Protect your business before a claim happens. Request a quote today.