Protect Your Business Against Employee Lawsuits
Employment Practices Liability Insurance (EPLI) is a vital coverage designed to protect your company against claims made by employees, former employees, or even job candidates alleging wrongful acts. For any business with employees, from small startups to large enterprises, EPLI is essential to defend against costly lawsuits that are typically explicitly excluded from standard General Liability (GL) policies.
Macario Insurance Group offers customized EPLI solutions across numerous states, including California, Arizona, Florida, Georgia, New York, Texas, Washington, and others, specializing in securing robust coverage that addresses the specific risks facing employers today.
What is Employment Practices Liability Insurance (EPLI)?
EPLI covers the costs associated with defending against lawsuits related to employee rights and workplace disputes. It pays for your defense costs, settlements, and judgments arising from various wrongful employment acts.
Common Employee Allegations Covered by EPLI:
| Category | Covered Claim Examples |
| Discrimination | Claims based on age, race, gender, religion, disability, or sexual orientation. |
| Hiring & Firing | Wrongful termination, failure to hire, breach of employment contract. |
| Harassment | Sexual harassment, hostile work environment, or verbal abuse. |
| Workplace Offenses | Retaliation (for whistleblowing or filing a claim), negligent evaluation, invasion of privacy, and defamation. |
EPLI provides coverage for these claims, regardless of whether your company is ultimately found at fault. The policy pays for the substantial legal fees required for defense, which can often exceed the eventual settlement amount.
EPLI in California: Expertise for High-Risk Markets
The legal landscape in California—particularly in high-litigation regions like Los Angeles County and the Bay Area (San Francisco, Oakland, etc.)—makes obtaining adequate EPLI coverage exceptionally challenging. Due to California's unique labor laws and high-frequency litigation environment, many standard insurance carriers restrict or completely refuse to write policies for companies operating here.
Macario Insurance Group has established relationships with specialty carriers who are willing to underwrite EPLI policies for businesses in these challenging California markets. We specialize in finding solutions for California employers, including access to defense counsel and policies tailored to address state-specific risks like:
- PAGA (Private Attorneys General Act) Lawsuits
- Complex Wage and Hour Litigation (often excluded from standard EPLI policies)
If you operate in California, relying on a broker with access to these specialized carriers is crucial to ensuring continuous protection.
EPLI Risk and Coverage Gaps
Employment claims are one of the fastest-growing areas of corporate liability. The modern workplace presents significant litigation risks.
Why You Cannot Rely on Other Policies:
- General Liability (GL): Specifically excludes all employment-related claims, unless the coverage has been added on, but this is typically not full EPLI.
- Directors and Officers (D&O): D&O policies alone only cover management decisions made on behalf of the entity; they do not cover claims by non-executive employees alleging wrongful treatment. Please note however that EPLI can often be packaged with D&O coverage for private businesses and non-profit organizations.
Critical Caveat: Wage and Hour Claims
Most standard EPLI policies contain an Absolute Exclusion for Wage and Hour violations (claims related to overtime, misclassification, or missed breaks under the Fair Labor Standards Act, or FLSA). When possible, we can work to find policies that offer a limited sub-limit or endorsement for defense costs related to these complex suits, which are increasingly common.
EPLI Solutions for Small & Large Businesses
We tailor coverage to fit your company's stage and risk profile:
EPLI for Small and Mid-Sized Businesses (SMBs)
Small businesses often lack a dedicated HR department, making them highly vulnerable to procedural errors (like documentation mistakes during termination). We help secure affordable policies, sometimes bundling EPLI with a Directors and Officers (D&O) policy for comprehensive management protection at a better rate.
EPLI for Large Businesses and Enterprises
For larger firms, we can focus on securing higher liability limits and specialized endorsements to handle complex class-action suits, multi-state employment regulations, and large-scale claims arising from events like mass layoffs.
Frequently Asked Questions (FAQ)
Who is covered under an EPLI policy?
EPLI typically covers the entity (the company), its directors and officers, and its employees (managers and staff) who are accused of wrongful actions during their employment.
How can a company reduce its EPLI premium?
Carriers offer lower premiums to businesses that demonstrate proactive risk management. This includes having:
- An updated and comprehensive employee handbook.
- Mandatory sexual harassment and anti-discrimination training for all staff and management.
- A dedicated Human Resources consultant or department.
If an employee files a complaint with the EEOC, is that covered?
EPLI typically covers the defense costs associated with administrative actions, such as investigations by the EEOC (Equal Employment Opportunity Commission) or state fair employment agencies.
The Macario Insurance Group, LLC Difference
We are an independent broker with the expertise to navigate the complex world of employment liability. We work with A-rated carriers to find you a policy that provides both robust defense coverage and favorable pricing.
- Quick 30 Second form
- Zero Cost, Zero Obligation Quote
- We help assess your HR practices to ensure you qualify for the best available rates.
