What is Employment Practices Insurance?

employment practices insurance

Employment practices insurance provides coverage to employers against claims made by employees due to allegations of wrongful practices.

Small or new businesses are often the most vulnerable to employment claims. This is because small businesses usually lack a  strong legal department or employee handbook detailing the policies and procedures that guide hiring, disciplining or terminating employees.

Employment practices insurance provides protection against lawsuits that are not covered by general business liability insurance. EPLI also includes protection for the full company as directors’, and officers’ liability insurance only protects the individual.

What is covered?

Employment Practices Insurance provides protection against a range of employee lawsuits, including claims of:

  • Sexual harassment
  • Discrimination
  • Wrongful termination
  • Breach of employment contract
  • Negligent evaluation
  • Failure to employ or promote
  • Wrongful discipline


What should you know?

The cost of insuring your business for employment practices insurance coverage depends on a variety of factors, such as:

  • The number employees
  • If the business had previous lawsuits
  • The percentage of employee turnover
  • Employee regulation and rules handbook details

Employment practice insurance prepares employers to deal with such risks and losses from employment culture claims. Although employment practices insurance is not meant to replace strong and respectful employment practices. In fact, most insurance companies will not insure a company unless it has some basic employment practices in place.


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