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Employment practices liability insurance for nonprofit organizations
If a nonprofit organization is accused of wrongful termination, discrimination, harassment, or another employment-related violation, employment practices liability insurance (EPLI) can help cover legal expenses, settlements, and judgments. This coverage is also often available as an endorsement to a general liability policy or business owner's policy.
EPLI covers the cost of employee lawsuits
While directors and officers (D&O) insurance provides coverage for board decisions that result in financial loss for your nonprofit, it doesn't protect against claims that an employee’s rights were violated. Employment practices liability insurance (EPLI) covers the cost of lawsuits over employment-related issues.
This policy offers coverage related to:
- Employee harassment or discrimination
- Wrongful discipline, demotion, or termination
- Alleged hostile work environment
- Unfair hiring practices
- Breach of employment contract
Bundle EPLI with D&O to save
Many nonprofits purchase EPLI and directors and officers insurance together to protect against a wider range of management and employment-related claims. While D&O insurance can help cover lawsuits involving board members, officers, and other leaders, EPLI addresses claims brought by employees alleging violations of their rights.
Bundling EPLI with D&O insurance as part of a management liability package often costs less than purchasing each policy separately. Insureon's licensed insurance agents can help you compare coverage options and find the right combination of policies for your nonprofit organization.
Find employment practices liability insurance quotes for nonprofits
What coverage can EPLI provide for nonprofits?
Employment practices liability coverage helps nonprofits manage the financial impact of employment-related claims. Whether an allegation comes from an employee, job applicant, or volunteer, EPLI can help cover legal expenses associated with a variety of workplace disputes.
Specifically, EPLI can protect nonprofits against:
Employee harassment or discrimination
From community centers to churches, there’s always a chance a manager in your organization could be accused of mistreating a staff member or volunteer. If one of your employees files a charge with the Equal Employment Opportunity Commission (EEOC) or sues your nonprofit for alleged sexual harassment or discrimination, this policy can cover the resulting legal expenses.
Wrongful discipline, demotion, or termination
Termination can bring up intense emotions, and workers may take an employer to court if they feel they were treated unfairly.
If a staff member accuses your nonprofit of wrongful discipline, demotion, negligent evaluation, or termination, EPLI can safeguard your small business against legal costs, settlements, and judgments.
Alleged hostile work environment
From a staffer suing a community center for failing to deal with a rude coworker to someone at your counseling center claiming an unpleasant work environment, this coverage helps nonprofits handle the high cost of attorney's fees, a settlement, or a court-ordered judgment.
Unfair hiring practices
Employers are prohibited from considering several factors during the hiring process, such as race, religion, and gender.
If an employee claims your nonprofit made a decision to hire or promote based on discriminatory information or files an EEOC complaint, EPLI provides the funds to cover your defense and settle lawsuits quickly.
Do nonprofits need employment practices liability insurance?
Employment practices liability insurance typically isn't required by law, but it can be a valuable part of a nonprofit's risk management strategy. Any organization with employees can face employment-related allegations, including those involving the Family and Medical Leave Act (FLMA), regardless of its size, mission, or budget.
EPLI can benefit a wide range of nonprofits, including charities, religious organizations, community centers, animal shelters, and counseling organizations. It's especially helpful for nonprofits with multiple employees, managers, or hiring responsibilities, as employee disputes can arise as organizations grow.
Having this coverage can also help attract and retain talented leaders and employees by demonstrating your nonprofit takes workplace risks seriously and has protections in place for employment claims.
Top nonprofits we insure
How much does employment practices liability insurance for nonprofit cost?
The average cost of an EPLI and D&O insurance bundle for nonprofit businesses is $126 per month. However, you could pay more or less depending on your unique risks.
A small nonprofit with only a few members on staff will pay less for coverage than a large charity with several employees and volunteers.
Underwriters will look at several factors when determining your premium, including the services you provide, any risks associated with your nonprofit, and the amount of coverage you need.
What factors impact nonprofit EPLI costs?
The cost of EPLI for a nonprofit depends on several factors, including:
- Nonprofit services offered: The type of services and activities your nonprofit provides can affect its risk level. For example, an animal shelter may face different liability risks than a community center.
- Number of employees and volunteers: A larger workforce generally means more potential for employment-related disputes, including accidents, injuries, or other liability claims.
- Revenue and finances: An insurer may consider your nonprofit’s revenue and financial activity, including grants, donations, and program fees, when assessing its overall risk.
- Location: EPLI costs can vary based on where your nonprofit operates. State and local employment laws and the frequency of workplace claims can affect insurers' assessment of risk.
- HR management practices: Insurers may look at whether your nonprofit has established HR policies and procedures, such as an employee handbook, anti-harassment and retaliation policies, employee training, and processes for handling workplace complaints.
- Employee turnover rate: Frequent hiring and terminations can increase opportunities for employment disputes, which may lead insurers to view nonprofits with high turnover as a greater EPLI risk.
- Hiring and termination practices: Consistent, well-documented hiring, performance management, and termination procedures can help demonstrate that your nonprofit actively manages employment risks.
- Policy limits and deductible: Higher coverage limits generally increase premiums, while choosing a higher deductible can lower the cost of coverage.
- Claims history: A history of filing claims or lawsuits can affect your nonprofit's premium and the coverage options available to it.
Other important policies for nonprofits
EPLI coverage offers protection for when an employee sues your organization over their rights, but it doesn’t provide coverage for other common risks. Owners of small nonprofits should also consider additional types of coverage as part of their risk management plan, such as:
General liability insurance: This policy can pay for legal defense costs related to client injury and property damage, along with accusations of slander or defamation.
Business owner's policy (BOP): A BOP bundles general liability with commercial property insurance, often at a lower rate than if the policies were purchased separately.
Professional liability insurance: Also known as errors and omissions (E&O) insurance, this policy can help cover legal expenses if a nonprofit is sued for unsatisfactory or negligent work.
Workers’ compensation insurance: Required in nearly every state for nonprofit organizations that have employees, workers’ comp can cover medical costs for work injuries.
Get free EPLI quotes and buy online with Insureon
Protect your nonprofit from costly employment-related lawsuit expenses with the right EPLI coverage. Insureon makes it easy to compare quotes from top-rated insurance companies, customize your coverage, and purchase a policy online.
Complete Insureon’s easy online application today to review EPLI options tailored to your nonprofit. Once you find the right policy, you can begin coverage and receive a certificate of insurance (COI), often within 24 hours.
What our customers are saying
Updated: August 24, 2026
The average costs on this page were derived from our data on small business owners in the nonprofit field who purchased policies through Insureon. Most of our customers have less than five employees, annual revenue ranging from around $50,000 to more than $200,000, and five years or less in business.
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