Employment Practices Liability Insurance: Protecting Employers from Workforce Claims

What Is Employment Practices Liability Insurance?

Employment Practices Liability Insurance — commonly called EPLI — protects businesses from the financial consequences of employment-related claims brought by current employees, former employees, and in some cases job applicants. Employment claims are one of the most common and most expensive categories of litigation facing businesses of all sizes, and the costs of defending a claim — even a meritless one — can reach tens of thousands of dollars before a verdict is reached.

GLS Insurance provides EPLI coverage for businesses across all 17 states in our service territory. Employment law varies significantly by state, and the litigation environment in states like Illinois, Florida, Texas, North Carolina, and Georgia makes EPLI particularly important for businesses operating in those markets.

What Does EPLI Cover?

• Wrongful Termination — Claims alleging that an employee was terminated illegally, in violation of their contract, in retaliation for protected activity, or for discriminatory reasons.

• Discrimination — Claims of discrimination based on race, gender, age, disability, religion, national origin, sexual orientation, and other protected characteristics under federal and state law.

• Sexual Harassment — Claims of a hostile work environment or quid pro quo harassment. One of the most common and most costly employment claim categories.

• Retaliation — Claims by employees who allege they were penalized for reporting illegal activity, filing a complaint, or exercising a protected legal right.

• Wage and Hour Claims — Some EPLI policies include coverage for wage and hour violations, though this varies by carrier and policy form.

• Failure to Hire or Promote — Claims by applicants or employees who allege they were passed over for employment or promotion based on protected characteristics.

What EPLI Does NOT Cover

• Intentional Criminal Acts — Claims arising from proven criminal conduct are excluded.

• Workers’ Compensation Claims — Covered under workers’ comp, not EPLI.

• ERISA-Related Claims — Fiduciary claims related to retirement plans are covered under fiduciary liability insurance.

• Bodily Injury — Covered under general liability or workers’ comp.

Why Every Employer Needs EPLI

Research consistently shows that between 30% and 60% of businesses will face an employment-related claim at some point. Many of these claims come from former employees, are filed without legal merit, but still require significant resources to defend. Even when an employer wins, the legal fees to reach a defense verdict can be substantial.

The employment law environment varies across our 17-state territory. Illinois and Colorado have robust employee protections and an active plaintiff’s bar. Texas and Florida are traditionally more employer-friendly but still see significant EPLI claims volume. States like North Carolina and Georgia are experiencing increasing employment litigation activity as their economies grow. EPLI provides the financial protection to defend against claims in any of these environments.