EPLI for Law Firms: Employment Practices Liability in a Post-Pandemic World

Employment practices liability insurance, commonly known as EPLI, covers law firms against claims brought by current, former, or prospective employees alleging wrongful employment practices. In the years since the pandemic reshaped workplace norms, EPLI has become an essential coverage for law firms of all sizes as the employment landscape has grown more complex and litigious.

What EPLI Covers

EPLI policies typically cover defense costs and damages arising from allegations of discrimination based on race, gender, age, religion, disability, and other protected classes. Coverage also extends to sexual harassment claims, wrongful termination, retaliation, failure to promote, and wage and hour disputes, though wage and hour coverage may require a separate endorsement. Some policies also cover claims related to employment-related defamation, invasion of privacy, and negligent hiring or supervision.

Why Law Firms Need EPLI

Law firms are not immune to employment claims, and in some ways they face elevated risk. The hierarchical structure of law firms, the high-pressure work environment, and the power dynamics between partners and associates can create conditions that give rise to harassment and discrimination allegations. Additionally, law firms frequently make termination decisions based on subjective performance evaluations, which can be challenged as pretextual. The irony of a law firm being sued by its own employees is not lost on carriers, but the risk is real and growing.

Post-Pandemic Considerations

The pandemic introduced new employment practices challenges that continue to generate claims. Decisions about return-to-office mandates, remote work accommodations, vaccination policies, and hybrid work arrangements have all produced EPLI claims. Firms that denied flexible work requests may face disability accommodation claims, while those that reduced staff during economic uncertainty face wrongful termination and disparate impact allegations. These pandemic-era claims continue to work through the system and drive EPLI loss activity.

Coverage Limits and Deductibles

EPLI policies for law firms typically offer limits ranging from $250,000 to $5 million or more, depending on firm size and employee count. Deductibles can range from $2,500 for small firms to $25,000 or more for larger organizations. When selecting limits, firms should consider not just potential damage awards but also the cost of defending employment claims, which can easily reach six figures even for meritless allegations that are ultimately dismissed.

Third-Party Coverage

An important extension to consider is third-party EPLI coverage, which protects against discrimination or harassment claims brought by non-employees such as clients, vendors, or opposing counsel. This coverage is particularly relevant for law firms where attorneys regularly interact with the public and with opposing parties in adversarial settings.

Risk Management Strategies

Carriers evaluate EPLI risk based on firm size, employee turnover, industry, and the strength of the firm's employment practices. Firms can improve their EPLI positioning by maintaining a comprehensive employee handbook that is regularly updated, conducting anti-harassment and anti-discrimination training at least annually, implementing clear complaint and investigation procedures, and documenting all performance evaluations and disciplinary actions. Many EPLI carriers provide these resources as part of the policy, including access to employment law hotlines and sample policies.

The Bottom Line

EPLI is no longer an optional coverage for law firms. The cost of defending even a single employment claim can dwarf the annual premium, and the reputational damage from a public employment lawsuit can be devastating for a professional services firm. Every law firm with employees should carry EPLI and review its coverage annually as employment laws and workplace norms continue to evolve.