Glossary

Employment practices liability (EPLI)

Claims-made coverage for employee lawsuits alleging discrimination, harassment, wrongful termination, retaliation and similar wrongful employment acts.

Also called: EPLI, EPL, employment practices liability insurance, employment practices coverage

EPLI covers an employer sued by current, former or prospective employees over wrongful employment practices: discrimination, harassment, wrongful termination, retaliation, failure to promote and wrongful discipline. Many policies add third-party coverage when customers or vendors allege harassment or discrimination by your staff. The policy is claims-made, with a retroactive date, and defense costs usually erode the limit. The definition of "claim" often includes an administrative charge, such as one filed with the EEOC.

Standard exclusions include workers' compensation and bodily injury, which belong to other policies, and ERISA violations. Wage-and-hour claims are typically excluded or given a defense-only sublimit.

The exposure is large. The EEOC received 88,201 charges in fiscal 2025 and recovered $660 million. Title VII caps compensatory and punitive damages by employer size, from $50,000 for 15 to 100 employees to $300,000 above 500, but back pay and attorney fees fall outside those caps, and state laws add their own remedies.

Smaller employers are not exempt, because many state discrimination laws reach employers below Title VII's 15-employee threshold. Employment practices liability insurance (EPLI): what it covers covers the coverage in depth, Wage-and-hour exclusions and third-party EPLI covers the two common add-ons, and claims-made policy explains the trigger.

Last reviewed October 10, 2026

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Related terms

Claims-made policy A liability policy that covers claims first made against you and reported to the insurer during the policy period, whenever the underlying act occurred. Directors and officers (D&O) insurance Liability insurance protecting a company's directors and officers, and often the company itself, against claims alleging wrongful acts in managing the business. Defense costs The attorney fees, expert fees and other expenses of fighting a claim, which some policies pay on top of the limit and others deduct from it. Retroactive date The date in a claims-made policy before which wrongful acts are not covered, even if the claim is made and reported while the policy is in force. Extended reporting period A window after a claims-made policy ends during which claims can still be reported for incidents that happened while the coverage was in force.

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