Employment Practices Liability Insurance (EPLI) protects businesses from claims related to wrongful termination, discrimination, harassment, or other employment disputes. But how much does that protection cost?

Like most business insurance, EPLI pricing depends on your company’s size, structure, and exposure. Here’s how insurers think about EPLI premiums, what drives them up or down, and what you can do to manage your cost.

Average Cost For Employment Practices Liability Insurance

There’s no single price for EPLI. Your premium depends on your company’s risk profile: how many people you employ, where you operate, and how your HR processes are structured.

Insurance carriers review several key factors when determining cost:

Number of employees

The more employees you have, the greater the likelihood of a claim. Rapidly growing companies or those with high turnover typically pay more.

Industry and risk exposure

Some industries face higher claim frequency due to their work environments or regulatory complexity. Tech, healthcare, finance, and hospitality businesses often see higher premiums because of fast hiring cycles and evolving compliance requirements.

HR practices and documentation

Underwriters look closely at how you manage hiring, performance, and terminations. Companies with strong HR policies, documented procedures, and consistent training programs tend to get better rates.

Claims history

Prior allegations—especially those resulting in settlements—can significantly affect pricing. Even one recent claim can raise premiums or lead to higher deductibles.

Company growth and structure

Adding new offices, expanding into new states, or merging with other entities all increase exposure. Multi-state employers face additional complexity due to differing employment laws and regulations.

Coverage amount

Generally, the higher your coverage limits, the more expensive your policy will be. The amount of EPLI coverage you need depends on factors like how many employees you have, previous claims history, and how much you’re willing to pay before your insurance kicks in. 

Learn more about how much EPLI coverage you need.

Legal environment

Where your business operates matters. States like California, New York, and Illinois see higher EPLI costs because of strong worker protections and more frequent litigation.

Because these factors vary widely, it’s impossible to quote an average that applies to all companies. Instead, think of EPLI as an adaptable policy that scales with your business’s complexity and workforce size.

Who Pays More for Employment Practices Liability Insurance?

Certain types of companies may see higher premiums:

• Companies with more employees.
• Businesses in high-risk sectors (technology, finance, healthcare, education).
• Firms with prior claims or EEOC investigations.
• Organizations with weak or outdated HR documentation.

The Equal Employment Opportunity Commission (EEOC) reports that 88,531 discrimination charges were filed in FY 2024, a 9% increase over the prior year. As employment litigation becomes more frequent, insurers adjust pricing to reflect that trend.

What’s Included in Your Employment Practices Liability Insurance Premium

Most EPLI policies include coverage for:

• Defense costs: Legal fees, court costs, and settlement negotiations.
• Settlements and judgments: If your company is found liable.
• Administrative proceedings: EEOC or state agency investigations.

Your premium reflects not just the likelihood of a claim but the potential cost of defending it. It can cost employers around $75,000 to settle an employment claim before it reaches trial, and more if the case goes to court.

How to Lower Your Employment Practices Liability Insurance Costs

You can take practical steps to keep your EPLI premiums manageable:

Strengthen HR policies

Maintain a clear, up-to-date employee handbook that defines acceptable behavior, reporting channels, and disciplinary procedures.

Provide regular training

Annual training for managers and employees on anti-discrimination, harassment, and workplace ethics helps demonstrate due diligence.

Document everything

Maintain detailed records of hiring decisions, performance reviews, and terminations. Clear documentation can help defend against false or exaggerated claims.

Manage turnover

A stable, well-supported workforce lowers your risk. Exit interviews and prompt handling of grievances can prevent claims from escalating.

Bundle coverage strategically

Combining EPLI with complementary management coverages—like Directors & Officers (D&O) or Fiduciary Liability—can help streamline coverage and improve pricing. At Vouch, EPLI is part of a broader Management & Professional Liability (MPL) package built to protect leadership and HR decision-makers together.

EPLI premiums aren’t one-size-fits-all. They reflect your company’s people practices, history, and growth trajectory. Strong HR governance can keep your coverage affordable and demonstrate to underwriters that your company manages employment risk responsibly.

If you’re scaling fast, entering new markets, or formalizing HR systems, now’s the time to review your EPLI coverage.

Frequently Asked Questions

Can I buy EPLI on its own?

Yes, but you may be able to bundle it with Directors & Officers or Fiduciary Liability coverage as part of a Management & Professional Liability (MPL) package.

Does EPLI cover claims from independent contractors?

Sometimes. Some policies include contractors under “employees,” but others don’t. Check your definitions carefully or ask your broker.

Are defense costs included in the limit?

Most EPLI policies include defense costs within the overall limit, meaning every dollar spent on legal fees reduces what’s left for settlements.

Can good HR policies really lower my premium?

Insurers may offer better terms or rates to companies that maintain documented HR policies, training, and compliance programs.

How long does EPLI coverage last?

EPLI is typically written on a “claims-made” basis, meaning it only covers claims made while the policy is active. Maintaining continuous coverage is essential.

Vouch Specialty Insurance Services, LLC (CA License #6004944) is a licensed insurance producer in states where it conducts business. A complete list of state licenses is available at vouch.us/legal/licenses. Insurance products are underwritten by various insurance carriers, not by Vouch. This material is for informational purposes only and does not create a binding contract or alter policy terms. Coverage availability, terms, and conditions vary by state and are subject to underwriting review and approval.

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