Employment Practices Liability Insurance

From the moment that you start the pre-hiring process until the exit interview, you are vulnerable for a lawsuit. As a result, your business should take a hard look at whether it can afford to defend itself against alleged wrongful employment practices accusations. If not, there is an insurance solution called Employment Practices Liability that protects against wrongful termination, discrimination (age, sex, race, disability, etc.) or sexual harassment suits from your current, prospective or former employees. This coverage applies to directors, officers and employees, and can sometimes extend to third party liabilities.

Why Choose Employment Practices Liability Insurance?

According to researchers, three out of five employers will be sued by a prospective, current or former employee while they are in business. While many suits are groundless, defending against them is costly and time-consuming.

Employment Practices Liability Insurance provides protection from wrongful employment practices, including but not limited to:

  • Harassment
  • Discrimination
  • Actual or alleged wrongful dismissal, discharge or termination
  • Employment-related misrepresentation
  • Employment-related libel, slander, humiliation, defamation or invasion of privacy
  • Wrongful failure to employ or promote
  • Wrongful deprivation of a career opportunity, wrongful demotion or negligent evaluation
  • Wrongful discipline
  • Vicarious liability for intentional acts
  • Punitive damages

Many policies offer the following inclusions and add-ons:

  • Consultation, HR assistance and other risk management consultative services.
  • Coverage for defence costs outside the policy limits (for qualifying risks).
  • Third party liability coverage (for qualifying risks).
  • Volunteer workers can be added as additional insureds.
  • Extended reporting periods may be added.

Contact Steers Insurance today to learn more about Employment Practices Liability coverage and how we can help protect your business.

Employment Practices Liability

The following claims examples provide common scenarios where a claim may occur under an employment practices liability policy.

Note: These Claims Examples are for illustrative purposes only. Please remember that only the insurance policy governs the coverage terms, conditions and exclusions.

Hostile Work Environment

Allegations were made by an employee that his employer had created a hostile work environment by failing to deal with bullying co-workers.


A senior employee, whose employment was terminated, sued several directors for defamation following the publication of an “all staff” memo describing the termination.


An organization was faced with a complaint brought under human rights legislation by an employee who alleged that she had been discriminated against based on her race, colour, ancestry and ethnicity.

Wrongful Termination

A senior executive’s employment was terminated after allegations of sexual harassment were made against him by another employee of the organization. The executive sued his former employer for wrongful termination.


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