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Employment Practices Liability INSURANCE

Protection for allegations of wrongdoing in the workplace.

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3 MIN

Employment Practices Liability Insurance with Nicole

What EPL does & doesn't cover

Recommendations based on stage and vertical

Which add-ons make sense for your startup

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BECAUSE

The average cost for defending and settling employment law cases is $160,000.

WHEN

In certain states, as early as when hiring your first employee.

WHY

Any company with employees has EPL exposure.
There are over 180 employment-related laws, not including city and county regulations.

See recommended limits based on your stage and vertical

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THE PROTECTION

What Employment Practices Liability Covers

Discrimination

Lawsuits based on age, gender, race, etc.

Failure to promote

Employees for reasons not related to work performance.

Emotional distress

Losses caused by behaviors that are not fit for the workplace.

Third-party liability

Protection from costs related to damages or bills associated with a party unrelated to your business.

Harassment

Protection from claims including sexual harassment.

Improper hiring practices

Lawsuits filed by candidates that believe your hiring process is not legal.

Retaliation and wrongful termination

Allegations of being unfairly punished for speaking up about certain work-related issues.

What it doesn’t cover

Workplace injuries: typically covered by Workers’ Compensation.
Mismanagement of employee benefits, typically covered by Employee Benefits Liability.
Employee lawsuits alleging you mishandled your role as fiduciary, typically covered by Fiduciary Insurance.

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FROM THE ACTUARIES

Employment Practices Liability Claims Examples

Incident

A series A ad-tech startup receives a demand letter from a former employee alleging gender based wrongful termination and retaliation.

Resolution

The EPL policy provides coverage for the cost of attorneys’ fees to defend the startup and contributes to an early settlement in order to prevent a lawsuit from being filed.

Incident

A lawsuit is filed by a former employee against a series C fintech startup alleging discrimination and retaliation based on disability.

Resolution

The EPL policy provides coverage for the cost of attorneys’ fees to defend the startup against the lawsuit, as well the cost of any settlement or judgment up to the policy limits.

Incident

A co-founder of a real estate tech startup leaves the company due to disagreements with other executives on the team. One of the executives reacts to the co-founder’s departure announcement on Twitter with a comment on his management style. The startup receives a demand letter from the former co-founder alleging defamation.

Resolution

The EPL policy provides coverage and contributes to an early settlement within 1 month of the date the claim was made.

Wrongful termination retaliation

Incident

A series A ad-tech startup receives a demand letter from a former employee alleging gender based wrongful termination and retaliation.

Resolution

The EPL policy provides coverage for the cost of attorneys’ fees to defend the startup and contributes to an early settlement in order to prevent a lawsuit from being filed.

Alleged discrimination based on disability

Incident

A lawsuit is filed by a former employee against a series C fintech startup alleging discrimination and retaliation based on disability.

Resolution

The EPL policy provides coverage for the cost of attorneys’ fees to defend the startup against the lawsuit, as well the cost of any settlement or judgment up to the policy limits.

Co-founder alleging defamation

Incident

Resolution

The EPL policy provides coverage and contributes to an early settlement within 1 month of the date the claim was made.

INSURANCE 101

What’s the Difference? Workers’ Compensation, Employer’s Liability, and Employment Practices Liability

Once your startup begins hiring employees, using outside vendors, or working with independent contractors, your startup business insurance needs change as your risk exposure increases.

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