Employment practices liability insurance

Employment disputes are often inevitable. The tough economic environment and raft of new employment legislation in recent years has increased companies’ exposure to such disputes. Effective risk management and risk financing are crucial when managing this exposure and the potential legal costs it entails.

Employment practices liability (EPL) insurance is one of the key risk management tools for employers. It protects the company against allegations of ageism, sexism, racism, sexual harassment, wrongful termination and other alleged breaches of employment law brought by employees, former employees or potential employees.

Coverage is designed principally to protect your company, its directors, officers and current/former employees. The insurance covers legal defence costs and any settlement an employer might have to make at the end of the legal process.


Employment practices liability

Employment practices liability insurance is a complex and nuanced insurance purchase, the disclosures and claims handling approach require an experienced and strong practitioner to navigate these complexities. JLT prides itself in offering a balanced and revenue neutral view on all insurances offered and this class is a key example of this approach in practice.

Employment practices insurance is not an endeavour for all companies in all sectors. There are many examples where the implementation of this insurance (particularly where poorly managed) is harmful to the reputation of a business within the insurance market. In some cases, HR issues are treated in a highly secretive manner and late notice and non-disclosure issues create an environment of mistrust.

We would take the time to really understand your business and your situation for this exposure and determine if this is a risk that can or even should be transferred by insurance and run through the steps necessary to work to this goal.

Employment practices liability

This can include modelling different disaster scenarios, understanding key reporting and HR processes, highlighting where conflicts of interest exist and working with you on insuring or managing these exposures.

Our team’s technical and global market knowledge extends across different market cycles providing experience and foresight to help you secure the optimal market solution, whether you feel your risk is complex or transactional.

Our team negotiates directly with the market on your behalf, converting the messages we discuss into a market appropriate dialogue faithfully. Through this diligence our clients are provided with better service and results. Key messages are not diluted and insurers view us as empowered negotiators who can speak knowledgably about our clients.


Employees, former employees and candidate employees.

The policy covers a broad range of allegations including: wrongful dismissal or termination, harassment or discrimination on the basis of sex, race or religion, employment related libel, slander or defamation, deprivation of a career opportunity and negligent evaluation.

Yes, investigation costs is contained within the definition of defence costs and is contained in the key policy definitions section of this document.

Courts have in the past upheld the claims-reporting requirements, finding the requirements to be a condition of coverage. This policy requires notice as soon as practicable – carriers and courts differ on what length of time is practicable. In any event, failure to provide timely notice can result in loss of coverage.

A notice of circumstance is not a claim, but rather a potential claim which is usually defined as circumstances that might give rise to a claim in the future.

This policy may not be cancelled except for non-payment of the premium by the insured.

Subject to the terms and conditions of the policy, cover will automatically extend to cover the new subsidiary unless the entity is:

  • incorporated or domiciled in the USA
  • has any securities listed in the USA
  • has assets which are more than a given % of the total consolidated assets of the company, normally 15-20%.


350+ international clients120+ financial risk specialists10% FTSE 500 clients$500m limits global D&O programmes have been arranged for


Employment practices liability

Employers need protection from employment practices liability (EPL) lawsuits. What’s more with JLT is that you receive advice from an EPL expert:

  • sharing best practices and providing you with a better understanding of your risk exposure
  • with a single-minded commitment to cost management and claims performance
  • a practical problem solving approach, proven in resolving common issues

Employment practices liability

  • who will build the service delivery around your business needs
  • providing you the confidence and trust that you will always get the best results possible
  • treating you as a partner at all times
  • offering an integrated team that offers the depth of expertise, service and resource that your business needs.

Insurance solution

Subject to the policy terms, conditions and exclusions, an employment practice liability insurance policy will pay the loss from any claim in connection with employment practices liability.

Employment Practices Liability Definition

Any liability arising from any actual or alleged act, error or omission with respect to:

  • any employment of any past, present or future employee or insured person of the company;
  • any prospective employment of any person; or
  • any harassment of or discrimination against any natural person third party who is not an employee.

Key Policy Definitions:

  • A written demand
  • A civil, regulatory, mediation, administrative or arbitration proceeding, including a counter-claim seeking compensation or other legal remedy
  • A criminal proceeding

For a specified act, error or omission:

  • An extradition proceeding; or
  • An asset and liberty proceeding.
  • Reasonable fees, costs and expenses incurred by an insured after a claim is made, directly in connection with its investigation, defence, settlement or appeal
  • Reasonable fees, costs and expenses of accredited experts retained through defence counsel to prepare an evaluation, report, assessment, diagnosis or rebuttal of evidence in connection with the defence of a covered claim; or
  • The reasonable premium for any appeal bond, attachment bond or similar bond.
  • Any amount which the insured is legally liable to pay resulting from a claim including defence costs, pre investigation cots, investigation costs, awards of damages, awards of costs or settlements, pre- and post- judgement interest on a covered judgment or award, and the multiplied portion of multiple damages.
  • Fines and penalties
  • Taxes
  • Remuneration, except with respect to Court attendance extension
  • Amounts uninsurable by law; or
  • Compensation payable in respect of contractual or statutory notice periods.

Main Policy Exclusions:

Claims resulting from fraud, dishonesty or improper financial gains are excluded. Such conduct needs to be proven against the appropriate person (or formally admitted) for the exclusion to apply.

Claims resulting from matters notified to any previous insurance policy or any litigation which existed prior to any applicable retroactive date.

Claims resulting from bodily injury and property damage – this does not apply to a sub-limited amount for defence costs.

If the company is bought/merges or undergoes an IPO, then coverage does not apply to any actions committed following the date of such a transaction.

Coverage only applies to companies that you control (more than 50%). Claims resulting from actions before or after times when they were in your control are not covered.

Claims arising out of, based upon or attributable to the actual, alleged or threatened discharge, dispersal, release or escape of, or records concerning, pollutants; or any direction or request to test for, monitor, clean up, remove, contain, treat, detoxify or neutralise pollutants.