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Employment Practices Liability Insurance
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Employment practices liability insurance cost
The cost of employment practices liability insurance (EPLI) varies based on a number of factors about your business. Your premium is directly impacted by type of work you do and the size of your business, including number of employees, and more.
What is the average cost of employment practices liability insurance?
Small businesses pay an average premium of $222 per month, or $2,665 annually, for employment practices liability insurance.
Our figures are sourced from the median cost of policies purchased by Insureon customers from leading insurance companies. The median offers a better estimate of what your business is likely to pay because it excludes outlier high and low premiums.
Typical employment practices liability insurance costs for Insureon customers
While Insureon's small business customers pay an average of $222 monthly for employment practices liability insurance, 36% pay less than $150 per month for their policies, and another 19% pay between $150 and $250 monthly.
The cost varies for small businesses depending on their risks, number of employees, past claims history, and other factors—such as lawsuits filed by current or former employees accusing the company of defamation, violating an employment contract, and similar claims.
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Understanding EPLI insurance cost factors
Insurance companies consider several factors when determining how much to charge for an EPLI premium, including:
- Number of employees
- Revenue
- Industry
- Hiring and termination practices
- Employee turnover rate
- Risk profile
- Past EPLI claims history
How do policy limits and deductibles affect the cost of EPLI?
If you want an EPLI policy that covers more expensive lawsuits, you’ll need to increase your coverage limits – which means you’ll pay a higher premium to your insurance company.
The limits on employment practices liability coverage can vary significantly. Each policy has a per-occurrence limit and an aggregate limit:
- Per-occurrence limit. While the policy is active, the insurer will pay up to this amount to cover any single claim.
- Aggregate limit. During the lifetime of the policy (usually one year), the insurer will pay up to this amount to cover claims.
When buying a policy, it's a good idea to make sure the deductible is something you can easily afford. If you can’t pay for it in a crisis, your insurance won’t activate to cover your claim. The average deductible that Insureon customers select for EPLI is $10,000.
The right amount of coverage depends on your business needs. You want coverage that'll cover a potential lawsuit, without buying more than you need. Chat with a licensed insurance agent if you're unsure which deductible and limits are right for your business.
How does your industry impact the cost of employment practices liability insurance?
Our analysis of EPLI costs reveals that for small businesses, your industry has a large impact on your premium. Generally, industries with a higher rate of employment-related claims get charged a higher premium, while lower risk industries enjoy lower rates.
For example, healthcare facilities and consulting firms typically pay more for this coverage than other industries.
These industries often have to deal with lawsuits related to violations of employees' rights, so insurance providers take this into account when underwriting their policies.
The chart below illustrates how the type of business affects what you can expect to pay for an employment practices liability policy.
Top industries we insure
To see insurance costs for businesses in your industry, visit our industry-specific cost analyses.
Don't see your industry? Don't worry. We insure most businesses.
EPLI provides affordable, crucial protection against employee lawsuits
Though it's not required by state law like workers' compensation, employment practices liability insurance is equally important when you have employees.
At any workplace, employee claims of sexual harassment are always a possibility. An employee could also misread your motivations in decisions related to hiring, firing, and promotions. For example, an employee might sue over wrongful termination due to age discrimination, which could lead to a costly legal battle.
When someone sues your business – even if it's a frivolous lawsuit – you'll have to pay legal defense costs, such as the cost of hiring an attorney. If you lose the suit, you could end up paying a fortune in a court-ordered judgment or a settlement.
EPLI covers all of these costs, which could save your business from bankruptcy. Because the premium is based upon your level of risk and your industry, many small businesses pay only a small monthly premium for this coverage.
Keep in mind that employment practices liability is a claims-made policy, which means this policy must be kept active in order to file a claim.
How can you save money on EPLI?
Bundle policies. Many insurance carriers offer options to purchase different types of coverage together for a discount. You can often include what employment practices liability insurance covers with another employer’s liability insurance policy.
You might add EPLI coverage to a general liability policy, or a business owner’s policy (BOP). You could also combine your EPLI coverage with other types of management liability insurance, most commonly directors and officers insurance (D&O).
Pay your entire premium upfront. You can typically pay your premium in monthly or annual installments. It might be tempting to go with a smaller monthly payment, but consider paying the full annual premium instead, as it's often cheaper.
Proactively manage your risks. If your business has no claims history, you can expect lower insurance rates. An effective way to avoid claims is to create a comprehensive risk management plan that reduces the chance of employment-related lawsuits. For example, you might:
- Provide harassment prevention training
- Maintain a human resources department
- Form internal protocols for hiring and firing employees
- Respond promptly to claims of harassment
- Discuss harassment and discrimination in your employee handbook
- Make sure your business follows all state and federal employment laws
Why do small business owners choose Insureon?
Insureon is the #1 independent agency for online delivery of small business insurance. We help business owners compare quotes from top-rated providers, buy policies, and manage coverage online. By completing Insureon’s easy online application today, you can get free quotes for employment practices liability insurance and other business insurance policies from top-rated U.S. insurance companies.
Once you find the right policies for your small business, you can begin coverage in less than 24 hours and get a certificate of insurance for your small business.
Learn more about business insurance costs
Premiums vary based on the policies a business buys. See our small business insurance cost overview or explore costs for a specific type of insurance coverage.
Updated: January 22, 2024