Business
Employment Practices Liability Insurance (EPLI)
Published September 24, 2026 · Last updated October 1, 2026
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The short answer
Employment practices liability insurance (EPLI) pays when an employee, former employee, or job applicant sues your business over how they were treated at work. Think claims of harassment, discrimination, or wrongful firing. Small businesses that buy it through Insureon pay an average of about $257 a month.
Your general liability policy almost certainly doesn't cover these claims. Here's what EPLI does cover, what it leaves out, and how to tell if you need it.
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Why employment claims are a real risk
Employment complaints are common. In fiscal year 2025, the U.S. Equal Employment Opportunity Commission (EEOC) received 88,201 new discrimination charges and recovered almost $660 million for workers.
Even a claim with no merit costs money to defend. Small businesses often don't have an HR department or an employment lawyer on call, which is why the Insurance Information Institute says businesses of every size are vulnerable.
What EPLI covers
EPLI pays your legal costs, settlements, and judgments for employment claims like:
- Discrimination, including over age, race, sex, disability, or religion
- Sexual harassment
- Wrongful termination
- Breach of an employment contract
- Failure to hire or promote
- Wrongful discipline or demotion
- Emotional distress tied to how an employee was treated
- Mismanaging employee benefits
What EPLI usually doesn't cover
- Punitive damages, which are extra damages meant to punish
- Criminal acts
- Workers' comp claims. Injuries on the job fall under workers' comp.
- Violations of certain federal labor laws, including the National Labor Relations Act, the WARN Act (layoff notices), OSHA (workplace safety), and ERISA (retirement and benefit plans)
Read the exclusions on any quote carefully. Wage-and-hour claims are another area to ask about.
Why general liability doesn't cover this
General liability insurance covers injuries and property damage to outsiders, like a customer who slips in your store. Standard general liability policies exclude employment practices claims. You need EPLI as a separate policy, or as an add-on to a business owner's policy or package policy.
Claims-made: the timing rule to understand
Most EPLI policies are claims-made. That means the policy has to be in force both when the event happened and when the claim is filed. If you cancel your policy and a former employee sues later over something from last year, you may not be covered.
Ask about a retroactive date, the earliest date of events the policy will cover, and about "tail" coverage if you ever close the business or switch insurers.
What EPLI costs
Insureon's small business customers pay an average of $257 a month. About 38% pay under $200 a month, and another 33% pay $200 to $400. The average deductible they choose is $10,000.
Not a quote or an offer. Your price comes from the insurance company. Source: Insureon, updated July 13, 2026 (its small business customers).
What moves your price:
- Number of employees. More employees, more chances for a claim.
- Your industry and state.
- Turnover. Frequent firings and quits raise the risk.
- Your HR practices. A written handbook, clear policies, and documented decisions can help.
- Your claims history, limits, and deductible.
Who should consider EPLI
- Any business with employees, even one or two
- Businesses that are hiring, since applicants can bring failure-to-hire claims
- Businesses with high turnover, like restaurants and retail
- Businesses with customers on site, since some policies can add coverage for harassment claims from customers. Ask your insurer.
Keep reading
Adding employees? See workers' comp and payroll services.
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Sources
- Insureon, Employment practices liability insurance cost (updated July 13, 2026)
- Insurance Information Institute, Employment practices liability insurance
- Insurance Information Institute, Commercial general liability insurance
- U.S. Equal Employment Opportunity Commission, FY 2025 Agency Performance Report