Employment practice liability insurance (EPLI) is specialized insurance designed to protect against loss incurred in litigating and settling wrongful employment practices liability claims. It’s typically structured as gap insurance for the company, providing protection against lawsuits such as discrimination, breach of contract and wrongful discharge suits, which usually are not covered by general business liability insurance. Directors’ and officers’ liability insurance only protects the individual and not the company itself. EPLI is most commonly designed to fill this gap in coverage. It generally provides reimbursement for the costs incurred in defending a lawsuit but does not cover reimbursement for any penalties suffered.
