What do these examples all have in common?

• After reporting a safety violation, an administrator fires an employee.
• After participating in an age discrimination investigation of their employer, a manager subsequently excludes an employee from critical communications, meetings, and social events.
• After repeated bullying by their supervisor, an employee files a complaint with human resources; subsequently, the supervisor’s verbal abuse escalates, including in front of peers.

These examples suggest retaliation by an employer. Retaliation occurs when an employer’s administrator, manager, or supervisor, or the employer itself, punishes an employee for engaging in a legally protected activity.  Legally protected activities include opposing illegal practices, participating in workplace investigations, and reporting discrimination. 

Retaliation is a key rationale for filing an employment practices lawsuit and for pursuing claims with employment practices liability insurance.  Other common grounds for EPLI claims include breach of implied employment contract, discrimination, harassment, mismanagement of employee benefit plans, and unfair or wrongful acts (e.g., wrongful discipline, wrongful infliction of emotional distress, wrongful termination).  EPLI coverage may be provided through an endorsement to another policy (e.g., Business Owners Policy or BOP) or as a stand-alone policy.

EPLI coverage reimburses a company for lawsuit judgments and settlements.  Legal fees are usually included in the coverage, regardless of the suit’s outcome. Exclusions include punitive damages awards, as well as civil and criminal fees.  Also excluded are losses covered by workers compensation coverage.

Potential plaintiffs in employment practices lawsuits include former and current employees, job applicants, and independent contractors. Any of these parties may allege that a company violated their legally protected rights.

The environment for employment practices liability, like that for most exposures, continues to change.  The overuse of artificial intelligence in hiring, which can lead to bias, has altered the exposure for some employers (e.g., Amazon.com).  The #MeToo movement elevated awareness of sexual harassment, changing the exposure for some employers. The number of EPLI claims has grown in recent years. In addition, an increase in nuclear verdicts (i.e., awards exceeding $10,000,000), which has affected some other liability coverages, has also impacted EPLI.