Employment practices liability (EPL) insurance covers an organization, its directors and officers, and its employees against claims alleging damages because of wrongful employment practices such as sexual harassment, wrongful termination, and unlawful discrimination.

Most EPL policies are written by insurers using their own independently developed forms. Coverage typically applies to the insured’s liability for wrongful employment practices. Definitions of wrongful employment practices vary from policy to policy but generally include work-related acts such as the following:

Typical exclusions eliminate coverage for claims arising from labor disputes and collective bargaining; reorganization, downsizing, or closure of operations; violations of federal laws that establish fiduciary responsibilities for employers to their employees; and claims arising from the bankruptcy, insolvency, receivership, or liquidation of the employer.

Employment Practices Liability policies are usually written on a claims-made basis. Extended reporting periods of from one to three years are usually available for an additional premium.

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