What is EPLI?

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).

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