Employment practices liability insurance (EPLI) is gaining renewed attention as businesses confront increasingly complex employment risks.
Allyson Benda, senior vice president and senior broker at CRC Group, highlights that the shift reflects a broader pattern: workplace disputes are expanding in both scope and volume, with legal and cultural forces pushing employers into new territory.
“While large corporations often face the most public lawsuits, smaller businesses are still very much at risk. Nearly 20% of EPLI claims brought against companies with fewer than 500 employees lead to defense and settlement costs over $125,000, which can be financially damaging for a small operation,” she said.
These claims often stem from allegations such as harassment, discrimination, or wrongful termination. And while EPLI won’t cover intentional acts themselves, Benda said that’s not the point.
“Some mistakenly believe EPLI isn't needed because intentional acts are excluded. But EPLI covers legal and financial burdens from employment-related claims, even if those claims are unfounded.”
In today’s environment, companies are no longer just concerned with traditional claims. Benda pointed to a growing number of disputes involving newer legal interpretations and the use of emerging technologies in HR processes.
“Regulatory bodies are also paying closer attention to the use of AI in hiring and employment decisions,” she said. “In 2023, the EEOC brought a case against a company using AI screening software that violated the Americans with Disabilities Act (ADA). That case settled for $365,000.”
Beyond AI, Benda has seen increased claims related to transgender rights, disputes over pay equity driven by transparency laws, and pushback on Diversity, Equity, and Inclusion (DEI) initiatives.
“Lawsuits have increasingly focused on claims involving transgender employee rights, pay disparities under new transparency laws, and disputes tied to diversity, equity, and inclusion (DEI) programs,” she said.
Claims from third parties are also on the rise, including under Title III of the ADA, which addresses public-facing accessibility issues. Benda noted that website accessibility for users with hearing or vision impairments has become a particular flashpoint.
“Title III of the ADA... has been cited more frequently in lawsuits, particularly those involving website access for people with hearing or vision impairments,” she said.
State laws are adding another layer of complexity. Employers are being required to rethink not just how they hire but how they document and defend those practices.
This legislative trend is mirrored in how insurance carriers are approaching EPLI underwriting. As Benda explained, underwriters are not only reviewing claims history but also evaluating whether businesses are actively managing exposures through training and clear policies.
“Growing requirements around pay transparency and anti-harassment programs are leading to increased oversight from insurers,” Benda said. “Many underwriters now require businesses to provide sexual harassment training and maintain clear workplace policies as part of the application process.”
Benda also pointed out that some companies remain skeptical of EPLI, particularly those that believe strong internal procedures are enough to avoid litigation. But lawsuits can still occur, regardless of how prepared a business may be.
“A single claim involving harassment or discrimination can lead to hundreds of thousands of dollars in defense and settlement costs. Small and midsize businesses can struggle to recover from that kind of financial setback,” she said.
She also sees value in the broker-client relationship during this period of transition.
“Retail agents can bring valuable insight by helping clients identify their unique exposures and connecting them with experienced wholesale partners who understand the current insurance market,” Benda said.
With employment-related risks evolving rapidly and EPLI pricing still favorable, Benda believes now is the right time for companies to revisit their coverage.
“Now is a good time to revisit EPLI coverage,” she said. “Even organizations with strong HR procedures may still find themselves facing legal action.”
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