Understanding Your Employment Practices Liability Coverage to Decrease Risk in the Workplace

By Mary Fessler

Employment practice lawsuits can prove to be damaging financially and to a business’s reputation. According to the U.S. Equal Employment Opportunity Commission, there were 110 lawsuits filed in the 2024 fiscal year ending Sept. 30.  The average cost of employment practice claims is $217,000 and it can take nearly a year to finalize.

In the past, employers may not have considered employment practices coverage as necessary. However, employment-related litigations are not going away, so the need for this insurance coverage is as important as ever.

For employers, the best method of preventing employment discrimination in the workplace is becoming knowledgeable about what is expected and providing all employees with the policies and procedures required to work in a professional and balanced environment. Understanding the ever-changing employment landscape can help minimize an organization’s exposure to employment-related claims.

Most employers who carry dedicated employment practices liability coverage through leading providers have access to the risk management resources offered through their insurance carrier. These resources include best practice videos, articles, checklists and sample employee handbooks designed to help you mitigate employment exposures.

Many insurance companies also partner with law firms that specialize in employment practices litigation. The partnership between the insurance carrier and the law firm may also provide insureds with the benefit of a complimentary legal hotline. This hotline offers general guidance to mitigate any potential employment-related suits that could arise.

Services are available to you as a policyholder of employment practices liability coverage. An explanation of the resources available can typically be found in the onset of an EPL policy. A further review of the employment risk management services available can be discussed with your insurance broker.

This article originally posted in 2018 and has been updated.