EPLI or Employment Practices Liability Insurance is a type coverage for wrongful acts apparent to the employment process. Most frequently claims covered under such policies tend to be: discrimination, retaliation, sexual harassment, and wrongful termination.
Additionally, the policies cover claims stemming from a variety of other types of inappropriate workplace conduct, which may include employment-related defamation, invasion of privacy, failure to promote, deprivation of a career opportunity, and negligent evaluation.
The policies cover directors and officers, management personnel, and employees as insureds. Although, some exclusions apply: bodily injury (BI), property damage (PD), and intentional/dishonest acts. EPLI policies are written on a claims-made basis, so the forms contain “shrinking limits” provisions, meaning that insurer payment of defense costs (often a substantial part of the claim) reduce the policy’s limits.
Consider these key features:
- Limits available up to $15M for select risks
- Defense Costs in addition to the Limit of Liability available for eligible risks
- Broad definition of Employment Practices Act
- Most favorable venue wording for punitive, multiple, or exemplary damages
- Definition of claim includes: arbitration, regulatory and administrative proceedings, EEOC and DOL investigations, and requests to toll the statue of limitations
- Third Party Liability coverage
- Definition of Individual Insured includes leased employees
- Wage and Hour coverage is available
- Independent Contractor coverage is available
- A triple aggregate retention available for eligible insureds
- Availability of complementary coverages to provide broader risk management solutions including Directors & Officers, Fiduciary, Employed Lawyers, Crime and Cyber Liability
Although Employment Practices Liability Insurance is available as a stand-alone coverage, it is also frequently sold as part of a management liability package policy. In addition to providing directors and officers (D&O) and fiduciary liability insurance, management liability package policies afford the option to cover employment practices liability (EPL).