Cyber Insurance Blog

Why EPL Insurance Isn’t Optional For Your Clients

Why EPL Insurance Isn’t Optional For Your Clients

Your business clients must be ready to address unacceptable actions in the workplace as soon as they come to light. Otherwise, they risk losing business, their reputation, and substantial sums of money, in the form of legal fees and judgments.

Employment Practices Liability Insurance—EPLI or EPL Insurance for short; the terms are interchangeable—mitigates businesses’ exposure to lawsuits arising from alleged or actual mistreatment of employees. It covers defense costs in claims of discrimination, wrongful termination, harassment, and other employment-related matters.

At ProWriters, we equip brokers to give their clients the knowledge and coverage needed to do business with confidence. Few scenarios could prove more nerve-rattling than facing employee lawsuits without robust EPL Insurance in place.

Keep reading for EPL claims examples you can use to help your clients appreciate their need for this critical coverage.

EPL Claims Examples to Consider

The U.S. Equal Employment Opportunity Commission (EEOC) processes about 80,000 job discrimination complaints each year. Most are directed against small and mid-sized employers with 15 to 100 employees. In Fiscal Year 2022, the EEOC obtained more than $513 million in monetary benefits for victims of discrimination.

 Businessman places folded hands on EPL insurance policy on conference table as broker with pen in hand explains EPL coverage.

Common EPL claims examples include lawsuits alleging discrimination, harassment, failure to hire or promote, and wrongful termination on the basis of:

  • Age
  • Gender
  • Race
  • National origin
  • Disability
  • Religion
  • Pregnancy

Additionally, employees file suits alleging employers take retaliatory action against them for having previously claimed discrimination or for having disclosed illegal activity. In Fiscal Year 2020, for instance, retaliation was “the most frequently cited claim in charges filed with the [EEOC]—accounting for a staggering 55.8% of all charges filed—followed by disability, race and sex.”

Age Discrimination

During a job interview, a supervisor at aerospace components manufac­turer United Precision Products asked a 64-year-old job applicant his age. Ultimately, the applicant wasn’t hired.

The EEOC filed suit on the applicant’s behalf. In 2021, United Precision agreed to pay $60,000 and provide other relief to settle the case.

Sexual Discrimination

In 2022, video game publisher Activision Blizzard reached an $18 million settlement with the EEOC. It established a fund for eligible claimants who were subjected to sexual advances, revenge porn, sexual battery, and pregnancy discrimination.

Racial Discrimination

In 2023, a federal jury ordered Tesla to pay about $3.2 million to a Black former employee. He had sued the company for failing to act after he repeatedly complained to managers about racial harassment. Other employees allegedly “used racist slurs and scrawled swastikas, racist caricatures, and epithets on walls and work areas.”

The final judgment was less than the $137 million a previous jury awarded. Nevertheless, it illustrates the potentially high cost of EPL claims.

Disability Discrimination

In 2019, the EEOC filed suit against Walmart on behalf of a job applicant born with a congenital amputation of her right arm. Walmart allegedly refused to let her take its Physical Assessment Test for freight handlers without an assistive device she did not need.

Under terms of the consent decree, Walmart will pay $40,000 and provide additional training to managers.

Religious Discrimination

In 2019, a federal court ordered the Park Hotels & Resort chain to pay $21.5 million in punitive damages to a dishwasher. She claimed she was terminated because her religious obligations prevented her working on Sundays.

The appeals court cut the damages to $300,000. This case too, however, is an example of employment-related claims’ high costs.


In 2022, a jury ordered FedEx to pay a former employee $365 million in a racial discrimination and retaliation case.

The plaintiff alleged she’d been discriminated against because she is Black. Her manager, who is white, asked her to take a demotion. When she made a report to human resources, the same manager wrote her up and subsequently terminated her employment.

The jury found in favor of FedEx on the discrimination claims, but in favor of the plaintiff on the claims of retaliation.

No Business Is Perfect—EPL Insurance Protects Them

We assume few businesses actually intend to violate applicants’ or employees’ rights. But whenever people deal with people, mistakes can and will happen. Even honest ones can lead to legal and financial consequences.

Businesses can wonder, and perhaps worry, about what EPL Insurance coverage costs. As with most insurance, the higher the limits, the higher the premium.

The greater cost is not carrying EPL Insurance.

The average cost of employment lawsuits resulting in a defense and settlement payment is $160,000. Without EPLI coverage, according to Hiscox Insurance, companies would be an extra $110,000 out of pocket.

To find out how you can secure and sell the best EPL Insurance coverage for your clients, download our free eBook, How to Become Your Clients’ D&O Insurance and EPLI Expert. It will tell you what you need to know to help protect your clients from dangers they may not even realize they face.

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