EPLI Insurance: Cost, Coverage & Providers

Employment practices liability insurance (EPLI) is insurance to protect a small business from liability arising out of its employment practices as it relates to its employees. Claims against the business for wrongful termination, sexual harassment, or gender discrimination are examples of employment practices that EPLI covers. Small businesses can purchase EPLI as a standalone policy for $800 to $5,000 per year or bundle it with existing policies for as little as $400 annually.

For a no-obligation EPLI insurance quote, check out The Hartford. Their experts can assess the EPLI needs of your business and get you a customized quote in minutes.

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EPLI Insurance Providers

There are several carriers that offer EPLI for small and midsized businesses (SMBs). Even if they don’t reach litigation, EPLI claims can be expensive. Healthy employment practices require a robust knowledge of local, state, and federal guidelines and many well-thought-out policies and procedures. For those reasons, when looking for a provider, consider one with a good credit rating from an agency like A.M. Best and one that provides human resources (HR) support services with EPLI coverage.

The Hartford

The Hartford is a large, national carrier earning A ratings from rating agencies. The Hartford usually bundles EPLI with its business owner’s policy (BOP).

Hartford provides broader coverage than standard offerings because it extends coverage to third-party individuals, such as customers, vendors, or business invitees, who accuse the business of harassment or discrimination. You can also obtain EPLI through The Hartford as a standalone policy. The Hartford also offers prevention and education services through its website dedicated to EPLI: Hartfordhelp.com. You’ll find articles, training, and employee handbooks on this site.

Amtrust

Amtrust is an A-(Excellent) AM Best credit-rated provider. Amtrust offers EPLI targeting SMBs. Amtrust currently underwrites for more than 350 class codes, which means a large number of small businesses can find coverage with Amtrust. Its online portal is available for quote requests and has agents to assist you. Amtrust has a dedicated site, Employment Risk Solutions, to help your company be proactive about healthy employment practices.

Hiscox

Hiscox offers a quick and easy online quoting process. Hiscox has established itself as a leader within the insurance field of data analysis related to EPLI with multiple studies that many other carriers and institutes reference.

Purchasing an EPLI policy through Hiscox gives you access to what it calls “Hiscox C-Suite,” which is a management liability policy package designed for businesses with fewer than 1,000 employees within several industries, including accommodation and foodservice; agriculture, forestry, and fishing; construction; manufacturing; professional services; and retail. Unlike most EPLI policies, this policy comes with a 180-day extended reporting period following the termination of the policy.

CoverWallet

CoverWallet is an online small business insurance brokerage. You can obtain EPLI insurance costs from top carriers, including CNA, Liberty Mutual, and Chubb. These partnerships allow CoverWallet to offer multiple quotes for various insurance policies, including EPLI.

Business owners who want to compare prices before getting EPLI insurance should consider applying through CoverWallet, where they can receive multiple quotes from quality carriers. Business owners can compare and bind coverage in less than 10 minutes.

State Farm

State Farm is the largest domestic insurance company in the United States by market share and has the resources to provide the support your small business needs when handling employment practices issues.

If you purchase an EPLI insurance policy through State Farm, you can access its professional HR support through a free online service. This service includes consultation services. The support is unlimited and available through both phone and email. It also has more than 500 HR-related forms and handbooks, guidance on hiring and termination, and online training. The quote process is left entirely in the hands of their local agent.

Traveler’s

Traveler’s has more than 160 years of insurance experience in the personal and commercial line space. If you purchase an EPLI policy through Traveler’s, you’ll access the resource website it created for employment practices: Risk Management Plus+ Online® is a dedicated website providing management guidance on liability, crime, and risk mitigation. Through it, Traveler’s offers a personnel manual, checklists for appropriate hiring practices, quick instructional videos, and podcasts on issues that employers face. There are more than 6,000 articles available on topics ranging from cybersecurity to directors & officers (D&O) insurance.

Nationwide

Nationwide Insurance, with an A.M. Best rating of A+ (Superior) Nationwide, has the solid financial strength you want to handle costly EPLI claims. As with most other providers, agents perform the quoting process.

For its EPLI policyholders, Nationwide offers a dedicated loss control website where policyholders can access forms, policies, and advice on employment-related issues. There are also available online training and handbook policies. Finally, Nationwide has a hotline to a national law firm that can provide free, confidential advice for current scenarios employers face. This service is available in multiple languages.

How Much does EPLI Insurance Cost?

The average cost of EPLI insurance is $395 a month. However, this amount can vary widely depending upon many factors:

• Type of business: The nature of the business itself, whether it’s prone to high or low risk, impacts the overall carrier’s premium evaluation for your policy.
• Number of employees: A business with three part-time employees is less likely to experience an EPLI claim than a business with 100 full-time employees.
• Employee turnover: High turnover rates tell carriers there’s a greater potential for employment practices like wrongful termination.
• Hiring and firing practices: Many carriers will ask you during the quoting process what your policies are for hiring and terminating an employee and if you have an employee handbook.
• Protected revenue: Larger businesses with higher revenue have more to protect, requiring higher coverage amounts and increasing costs.
• Claims history: Nearly every carrier will ask if the business has or has any pending EPLI claims.
• Payroll: Many EPLI claims are directly related to the employee’s wage amount, so the higher overall payroll expense for the business can impact the premium.
• Deductible or self-insured retention (SIR): EPLI insurance often has either a deductible or SIR, the amount the policyholder is responsible for in a claim. Selecting a higher amount typically lowers your premium.

All of the above factors mentioned will form a profile that your insurance carrier will use to rate your policy.

What EPLI Covers

EPLI covers wrongful acts in hiring and terminating employees and employment practices. These acts may occur when an employer recruits, interviews, and evaluates candidates. According to the Equal Employment Opportunity Commission (EEOC), the top three complaints are:

• Retaliation: An employee testifies in a workers’ compensation case about their employer’s negligence and, after the trial, is fired.
• Race discrimination: An Asian American employee learns that, despite having the same education, experience, and job title, they make 20% less than their Caucasian colleagues.
• Disability: A candidate discloses a disability during the interview process and from the interviewer’s reaction, feels their disability was the reason they didn’t get the job.

Other claims covered by EPLI include:

• Age discrimination: An employee in their 50s is let go as part of a “downsizing” move. The company hires a much younger employee for the same role a month later.
• Pregnancy discrimination: A new employee informs her employer she’s two months pregnant and is fired shortly after being hired for a job.
• Wrongful termination: An employee makes a mistake on customer order and is fired. However, the employer didn’t utilize their handbook with guidelines for coaching these situations.

What EPLI Insurance Doesn’t Cover

Insurance policies don’t provide coverage for every loss. These gaps in coverage are called exclusions and are usually scenarios spelled out within the policy itself. Typically, other policies provide coverage when the EPLI doesn’t. That’s why it’s essential to ensure your business is appropriately protected.

Because EPLI is specific to employment-related practices, the coverage doesn’t extend to third-party property damage or bodily injury claims that a general liability policy would cover. If an injury happens to an employee while working, that would be a claim for your workers’ compensation policy. Should the injured employee accuse the business of negligence that resulted in their injury, that claim would be under the employer’s liability insurance.

EPLI Insurance & How it Works

EPLI covers the entire company from employment-related lawsuits. D&O coverage is protection for individual officers of the company. EPLI pays for your legal defense costs when a lawsuit is filed against your business from a current or former employee or even a job candidate because they believe they were subject to discrimination or punitive action. Some policies include independent contractors for coverage but review the policy in-depth with your agent.

Before You Apply for EPLI

Showing a prospective carrier that you’re being proactive in mitigating risk can help with the application process. Written policies for hiring, coaching, internal promotion, antidiscrimination, and termination can help prevent claims.

Many carriers stress the importance of creating an at-will policy that employees must sign. State laws may vary on at-will policies, so keep that in mind. A comprehensive employee handbook that centralizes your company policies also helps reduce the risk of an EPLI. Finally, consider hosting annual training for employees on how to avoid discrimination and harassment in the workplace.

Bottom Line

Nearly every small business with employees is at risk of employment-related incidents that can lead to litigation and expensive claims. EPLI policies cover these claims by paying for your legal defense, including awards and settlements.

The Hartford makes insuring your business from EPLI claims easy. Its experts will create a customizable policy to cover you against EPLI claims at the right price. Get a no-obligation quote online in minutes.

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