Modern HR departments are uniquely positioned to drive meaningful, lasting change within their organizations. One key area of influence? Choosing whether to purchase employment practices liability insurance (EPLI). From how it works to typical exclusions, this guide explains how EPLI coverage can help protect your organization from costly legal claims.
According to SHRM, EPLI covers claims that “usually are not covered by general business liability insurance.” These policies typically exclude claims involving:
Bodily injury
Property damage
Violations of federal labor laws, including:
Understanding these exclusions can help HR professionals choose the right mix of coverage and internal policies.
No—employment practices liability insurance is not legally required. However, many employers—especially larger corporations—purchase EPLI coverage as a protective measure in case they are sued by current or former employees.
Nationwide notes that small and new businesses are especially vulnerable to employment claims. These organizations may not have in-house legal teams or comprehensive, up-to-date employee handbooks, making them more susceptible to costly disputes.
The cost of EPLI coverage depends on several factors, including:
To get a more accurate estimate, reach out to a licensed insurance broker who can provide quotes tailored to your organization’s risk profile and needs.
While EPLI can provide essential protection, it’s not a substitute for solid HR policies. In fact, SHRM emphasizes that many insurers won’t offer coverage to organizations that lack basic employment procedures.
To reduce risk, HR teams should:
1. Keep the Employee Handbook Current
A comprehensive, up-to-date employee handbook should include:
(Need help? Check out BerniePortal’s guide to building a compliant handbook or Culture Guide.)
2. Update Investigation Protocols
If your incident response procedures haven’t been reviewed in years—or ever—make this a priority. Clear, fair, and consistent protocols for investigating complaints are essential.
3. Create or Refine Dispute Resolution Policies
Does your organization have formal arbitration or mediation policies? Specific guidelines for handling workplace disputes help protect your team and strengthen your EPLI defense.
You can stay informed, educated, and up to date with important HR topics using BerniePortal’s comprehensive resources: