07/01/2025
💼 Why Business Owners Shouldn’t Skip EPLI (Employment Practices Liability Insurance)
As a business owner, you work hard to create a respectful, professional environment for your employees. But even with the best intentions—and a great HR policy—your business could still face a costly legal claim. That’s where EPLI (Employment Practices Liability Insurance) comes in.
Yet, many small and midsize business owners skip this essential protection, often because they believe it’s only for large corporations or high-risk industries. The truth? Any business with even one employee is at risk.
🔍 What Is EPLI?
EPLI protects your business from claims made by employees (past or present) related to:
Wrongful termination
Discrimination (age, race, gender, etc.)
Sexual harassment
Retaliation
Failure to promote or hire
Mismanagement of benefits
Even if the claim is baseless, you still have to defend your business—which can cost tens of thousands of dollars in legal fees alone.
📈 Why the Risk Is Rising
Workplace lawsuits are on the rise, especially in the age of social media, remote work, and evolving cultural expectations. According to the EEOC:
The average employment lawsuit settlement is $75,000.
Legal defense costs can exceed $125,000, even when the business wins.
Over 60% of EPL claims are filed against small businesses.
If you think it won’t happen to your business, consider this: a single comment, misunderstanding, or termination could trigger a claim. EPLI helps cover legal costs, settlements, and judgments—so you’re not left paying out of pocket.
🧾 Real-World Example
A small business owner terminated an employee for repeated tardiness. The former employee claimed it was due to discrimination and filed a lawsuit. While the claim was ultimately dismissed, the employer spent $23,000 in legal defense—out of pocket—because they didn’t carry EPLI.
This happens more often than you'd think.
✅ What EPLI Covers (And What It Doesn’t)
Covered by EPLI Not Covered by EPLI
Discrimination claims Bodily injury or property damage
Wrongful discipline Workers’ comp claims
Sexual harassment Wage & hour disputes (optional add-on may be available)
Retaliation Criminal acts
🛡️ Final Thought
You carry insurance for your building, your vehicles, even your liability. But your biggest risk is your people. One claim can disrupt your operations, drain your resources, and damage your reputation.
EPLI is not just a “nice to have”—it’s a smart, affordable safeguard for today’s business environment.
Kayla Williams-DiNardo
Farmers Insurance Agent | Austin, TX
📞 [512]825-1498 | 📧 [email protected]
Helping business owners protect what they’ve built—with integrity and insight.