Employment Practice Liability (EPL)

Alliant > Executive Risk > Employment Practices Liability

Employment Practice Liability (EPL)

Employment Practices Liability (EPL) insurance protects organizations and individuals that work there for claims arising from the employment relationship. This includes claims of discrimination (based on a protected status such as race, religion, age, gender, etc.), harassment (either sexual or non-sexual workplace), retaliation, wrongful termination, or other inappropriate or unlawful workplace activity. EPL insurance policies now also commonly include coverage for harassment or discrimination claims alleged by an individual outside of the employment relationship such as a vendor, supplier or customer. This expansion of coverage is generally referred to as “Third Party EPL” coverage.

The most common claimant in an employment related claim is a current or former employee, though the Equal Employment Opportunity Commission, the Department of Labor, the Department of Justice and similar state or foreign governmental agencies can also bring claims. Employees acting together can bring claims as a group or in the form of a class action on behalf of thousands (or tens of thousands).

Employment claims can cost real money. Even when a claim is brought by a single employee, there is the potential for copycat claims by other employees. This makes resolution of an employment claim perhaps more complicated than other types of claims. Many employment claims allow for an award of punitive or multiplied damages as well which can significantly increase the financial exposure to the employer. Even for claims that appear to be meritless, the costs to defend such claims, and in particular attorney’s fees and expenses, quickly mount up.

EPL insurance was created and has been continually broadened to address these allegations. Insureds under a stand-alone policy include the company itself as well as the company's directors, officers, and employees. EPL insurance policies provide coverage for defense costs including attorney’s fees and expenses, as well as the costs to resolve claims including settlements and judgments.

EPL insurance is not standardized, so each insurer has its own policy form and its own methodology for evaluating and underwriting the EPL risk. The scope of coverage is negotiable so it is important to understand the exposure in order to craft the best insurance protection against that exposure. Since each insurer has its own appetite for this risk, it is important to know what expansions of coverage are within or outside of any particular insurer's appetite.

At Alliant we understand employment related risks. We take the time to learn about our clients’ specific liability exposures and business requirements to develop an insurance program that provides the best and most appropriate degree of insurance protection. We provide our clients with an insight into the insurance marketplace – carrier information (financial condition, coverage appetite and performance metrics), pricing trends and expectations, and state of the market coverage availability. We pay attention to the details because we know that are clients are relying on us to do so.

The Alliant Executive Risk Group brings together individuals with technical, legal, underwriting and claims experience on all types of executive risk exposures. Our product-specific practice transcends industry sectors to focus on risks faced by public and private companies and their directors, officers and others.

For more information, contact:

Brian Dunphy

Senior Vice President, Managing Director

The Specialty Leader Since 1925

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Employment Practice Liability (EPL)

For more information, contact: