Although often overlooked, Employment Practices Liability Insurance (EPL) can be extremely important in protecting your client’s business.

The business landscape is constantly changing. As workplaces evolve, there are more laws and regulations protecting employees and former staff. Allegations of wrongful termination, discrimination, harassment, and retaliation can arise and involve businesses in long and costly legal battles. EPL can help safeguard businesses from these risks, providing peace of mind and supporting fair workplace practices.

The Ever Changing Business Landscape

As businesses grow, the need for EPL insurance increases. Today’s workplace looks very different than it did even a few years ago. New technologies, changing employee expectations, transparency regulations, and cultural shifts have all created new exposures for employers.

Technology and AI Driven Hiring

While technology has benefited businesses in many ways, the use of AI in hiring and HR related tasks increases the risk of discrimination and bias. In 2023, the Equal Employment Opportunity Commission settled a $365,000 discrimination case in which AI hiring systems were biased against certain applicants. Without proper oversight, auditing, and bias safeguards, businesses using automation may unknowingly expose themselves to discrimination claims.

Greater Transparency and Employee Awareness

Increased visibility around pay equity, wage transparency laws, and a growing understanding of workplace harassment have enabled employees to speak up. As awareness grows, so does the likelihood of businesses facing employment related allegations. Even a single claim, regardless of merit, can be financially crippling for a business.

So how can EPL help?

What Does EPL Cover?

Employment Practices Liability Insurance protects companies from claims related to wrongful employment acts. These can include issues such as:

• Whistleblower activity
• Invasion of privacy
• Hostile work environment
• Wrongful acts committed via social media and the internet

Common EPL Claims

The most common EPL claims that businesses tend to see include:

• Breach of employment contract
• Discrimination
• Harassment
• Retaliation
• Workplace torts such as invasion of privacy and emotional distress
• Wrongful employment decisions such as wrongful termination or failure to promote

While policy details vary by carrier, EPL generally helps businesses by covering legal defense costs, settlement amounts, and other expenses that could otherwise jeopardize a company’s financial stability. It also works to protect a business’s reputation and long term stability.

Why Your Client’s Business Needs EPL Coverage

As technology, workplace expectations, and legal requirements continue to evolve, the risk of employment related claims only increases. Businesses can face allegations from employees, job applicants, vendors, and even customers. Without EPL, a single claim can cost tens or even hundreds of thousands of dollars in legal fees and settlements.

Even with other insurance policies in place, EPL fills a critical gap by specifically covering employment related disputes. Available as an endorsement to Coterie’s BOP and GL policies, EPL offers meaningful protection for today’s businesses. Learn more about how EPL can benefit your client’s business and what to expect from this coverage.