The Importance of Employment Practices Liability Insurance (EPLI) for CA Business Owners

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Employment Practices Liability Insurance (EPLI) covers such issues as wrongful termination and sexual harassment. 

If you own a company in the state of California, you may feel like staying abreast of the constant change in employment laws is like nailing Jell-O to the wall. It’s easy to get behind and because you haven’t made the necessary shifts in your insurance policies, find yourself without the protection you need.

The representatives at Fusco & Orsini Insurance Services in San Diego have found that the types of claims most business owners are unprepared for are those specific to their own workers. Many companies have little to NO coverage for issues brought by employees, such as wrongful termination, discrimination, sexual harassment and wage & hour.  These issues are typically referred to as employment practice claims or lawsuits.

By including Employment Practices Liability Insurance (EPLI) in their portfolio of business insurance coverage, management has a larger umbrella of protection to address such claims, in the event they occur. The actions filed most frequently by employees that are covered under EPLI include: sexual harassment, retaliation, discrimination and wrongful termination.

Business insurance that includes EPLI may also cover such inappropriate workplace conduct as employment-related: defamation, invasion of privacy, failure to promote, deprivation of a career opportunity, and negligent evaluation. These policies typically cover directors and officers, management personnel, and employees as insureds. The types of claims that are commonly excluded are: bodily injury (BI), property damage (PD), and intentional/dishonest acts.

A business owner may choose EPLI as stand-alone coverage, but it is frequently sold as part of a package policy. While a company’s policies may include more common coverage types, such as general liability and commercial property, there are many business owners neglecting the potential substantial losses from employee-related suits.

EPLI can cover the costs incurred to defend a company from an employee lawsuit, including legal fees charged by a law firm. EPLI can cover independent contractors and volunteers, as well as full-time workers, and may also cover damages awarded to an employee. If a legal settlement is awarded, EPLI may cover the settlement payment.

The following questions can help determine if you have a need for EPLI:

  • Do you hire employees? Is your workforce growing?
  • Do you have a written policy and procedures manual? Is the manual updated periodically? Does the manual include human resources policies?
  • Do your hire independent contractors or work with volunteers?
  • Do your employees come into contact or communicate with your customers (i.e. third parties)?
  • Has your attorney discussed employment practices liability with you?
  • Have other firms in your industry experienced employment practices litigation?

If you determine that employment practices liability insurance may be a need for you, our professional staff can discuss your firm’s specific needs and generate an insurance quote for you. Request a free quote.


See also DefamationDiscriminationDirectors and officers (D&O) liability insuranceErrors and omissions (E&O) insuranceFiduciary liability;Management liability insurancePersonal injury (PI)Retaliation claimsShrinking limits defense provision.” (source:


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