Employment Practices Liability Insurance (EPLI)

Definition

EPLI covers employer liability for claims brought by employees, former employees, or job applicants — discrimination, harassment, wrongful termination, retaliation, failure to accommodate, wrongful failure to hire/promote. Policies typically have specific exclusions for wage-and-hour claims (which are usually a separate Wage & Hour Endorsement) and intentional acts.

EPLI is increasingly viewed as essential rather than optional, particularly for businesses with 25+ employees. Defense costs alone for a single EEOC claim can reach $50K-$150K before any settlement; EPLI policies typically cover defense costs in addition to settlements within limits.

Many PEOs include some level of EPLI coverage in their bundled offering — either as a master policy covering all clients or as a discounted access to standalone coverage. Confirm the scope, limits, and deductibles during quoting.

Common questions about Employment Practices Liability Insurance (EPLI)

Related terms

• Wrongful termination — A termination that violates state or federal law — typically due to discrimination, retaliation, or public-policy violations.
• Workers compensation insurance — Insurance that pays medical expenses and lost wages for employees injured on the job, in exchange for limiting the employer's tort liability.

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This is one entry from our PEO glossary covering payroll, benefits, workers comp, HR compliance, and PEO mechanics. Browse all terms.