Employment Practices Liability — Frequently Asked Questions

EPLI covers claims alleging wrongful termination, sexual harassment, workplace discrimination based on race, gender, age, religion, disability, or other protected characteristics, retaliation against whistleblowers, failure to promote, negligent hiring or supervision, and wage and hour violations. The policy pays for legal defense costs, settlements, and court judgments. Coverage extends to claims brought by current employees, former employees, and in many cases prospective employees who allege discriminatory hiring practices.

Generally no, but there are exceptions. If you use independent contractors, interns, or temporary staff, they may have standing to bring employment-related claims against you depending on your jurisdiction. Additionally, if you share office space or resources with other attorneys, the lines between independent practice and employment relationships can blur. Solo practitioners planning to hire their first employee should secure EPLI coverage before the hire date, as claims often arise during the early employment period.

Yes. EPLI policies cover claims from former employees, which represent a significant portion of employment-related lawsuits. Wrongful termination claims, by definition, come from former employees. Retaliation claims, post-employment defamation, and allegations of constructive discharge also originate after the employment relationship ends. Since EPLI is written on a claims-made basis, the policy in force when the claim is first reported responds, regardless of when the employee left the firm.

Third-party EPLI coverage protects against harassment or discrimination claims brought by non-employees such as clients, opposing counsel, vendors, or court personnel. Standard EPLI only covers claims from employees. A law firm client who alleges sexual harassment by an attorney, or a vendor who claims discriminatory treatment, would trigger the third-party coverage extension. This endorsement is increasingly important as courts expand the scope of workplace conduct liability beyond the traditional employer-employee relationship.

Coverage needs scale with employee count and firm complexity. Firms with fewer than 25 employees typically carry $500,000 to $1,000,000 in EPLI limits. Firms with 25 to 100 employees should consider $1,000,000 to $3,000,000. The average employment practices lawsuit costs between $75,000 and $125,000 to defend, even when the employer prevails, so limits should account for multiple simultaneous claims. Firms with high turnover or recent terminations face elevated risk and should carry higher limits.