What is EPLI?
Short answer
EPLI is insurance that covers employer claims such as harassment, discrimination, wrongful termination, and retaliation. General liability excludes those claims, so EPLI is a separate policy that pays defense costs and settlements, subject to its limits and exclusions.
What EPLI covers
- Defense costs for employee claims, including attorney fees, mediation, and investigation
- Settlements and judgments for harassment, discrimination, and retaliation allegations
- Wrongful termination and failure to promote claims
- Some forms add wage and hour defense, though damages are usually excluded
- Third-party EPLI, when endorsed, for claims from customers, vendors, or applicants
What EPLI does not cover
EPLI is not a general employment policy. It excludes bodily injury and workers compensation claims, which belong to other policies, and it typically excludes wage and hour damages, contractual obligations, and intentional or criminal acts. Many forms also exclude claims known before the policy started, so disclose any pending dispute at application.
Who needs EPLI
Any employer with staff, including firms with a handful of employees. California employers face a demanding statutory landscape, and a single harassment claim can cost more in defense than a small firm earns in a year. Businesses with high turnover, multi-state staff, or a history of complaints should treat EPLI as core coverage rather than an optional add-on.
How EPLI is priced
Premium depends on headcount, industry, revenue, employee turnover, written policies and training, prior claims, and the limits and deductible selected. Common limits start around $1M per claim, and any figure is subject to underwriting review.
Common questions
- Is EPLI required by law in California?
- No, California does not mandate EPLI. Most employers buy it because defense costs for a single harassment or discrimination claim can exceed the premium many times over, and because some contracts and investors require it.
- Does general liability already cover employment claims?
- No. General liability typically excludes employment-related claims, which is why EPLI exists as a separate policy. Cyber and professional liability do not respond to them either.
- What limits do small employers buy?
- Many small employers start at $1M per claim with a $1M or $2M aggregate, then raise limits as headcount grows. Limits and pricing are subject to carrier underwriting.
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Professional Resource Insurance Agency, LLC. CA License #0G81238. Definitions are general information, not coverage advice for a specific policy.