Michael Warren Insurance Agency

Employee Practices Liability Insurance

Employers liability insurance protects your company from financial losses in the event that an employee or a third party sues you for a work-related accident, illness, or death.

Aon can assist you in obtaining employment practices liability insurance (EPLI), which covers claims of discrimination (based on sex, race, age, or disability), wrongful termination, harassment, and other employment-related issues brought by employees.

If you don’t have this form of insurance, you’ll have to pay for the costs of the case out of pocket. After a major accident, this could result in a considerable financial loss.

Many restaurant owners and managers are not aware of the crucial need for employment practices liability (EPL). This type of coverage protects business owners from common exposures and claims regarding discrimination, wrongful termination, disability rights, retaliation, and more.

See below for a claims example for wrongful termination & retaliation in a restaurant:

A male fry cook filed a workers compensation claim after burning his hand while making a batch of french fries. Shortly after returning to work, the employee was fired because of his repeated tardiness prior to the incident. Upon investigation, the employer did not have any documentation proving he was ever late. The employee settled out of court for $10,000 after $12,000 was spent in defense.

Available as a policy endorsement or stand-alone coverage, a few EPLI claims examples include:

  • Sexual harassment. The harassers can be senior managers, supervisors, co-workers or even non-employees.
  • Discrimination. This includes unfair treatment based on religion, age, ethnicity, gender, disability, skin color, sexual orientation or race.
  • Wrongful termination. According to the Equal Employment Opportunity Commission (EEOC), this is the most common claim brought against employers.

Other EPLI claims examples covered are a breach of an employment contract, negligent evaluation, failure to employ or promote, wrongful discipline, deprivation of a career opportunity, wrongful infliction of emotional distress and mismanagement of employee benefit plans.


While an essential coverage tool, EPLI policies are not all-encompassing. They commonly exclude criminal or civil fines, penalties or punitive damages, bodily injury and property damage claims, state unemployment insurance claims, workers’ compensation claims, and claims filed under the Fair Labor Standards and Occupational Safety and Health Acts.