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Employment practices liability insurance

You can be sued for employment discrimination by current employees, employee guests, people who applied but weren’t hired and past employees – no matter how their employment with you ended.

Are you protected from the cost of an employment discrimination claim that could hurt your business financially, even bankrupt it? Do your employees receive regular training on diversity and cultural competence?

Experts advise protecting your business from such claims begins with a two-part strategy: implementing policies and training for all employees and securing Employment Practices Liability (EPL) coverage against discrimination lawsuits.

“At a time in our industry when we are forced to maximize human capital, the potential for employment-related claims has a tendency to increase,” said Bill Wilson of VGM Insurance Services. “It’s important not only to review your current insurance coverage to ensure you are adequately protected, but also to ensure that your employees are trained to handle change and diversity in the workplace.”

Employee claims of discrimination are not uncommon

Think you’re not at risk for a discrimination claim? In 2015, U.S. Equal Employment Opportunity Commission (EEOC) resolved 92,641 individual charges of discrimination. The EEOC enforces all federal employment discrimination laws. The top five types of discrimination claimed were race, disability, sex, age and national origin.

Win or lose, discrimination claims will cost you

Monetary benefits awarded by the EEOC in 2015 totaled $356.6 million (in 16,761 cases that were not closed by EEOC). That’s an average of $21,276.

And, that amount doesn’t take into account a company’s legal costs to defend a claim, win or lose. On top of that, there are also additional costs if you do lose, such as employee training and creating and implementing new policies required by the EEOC. 

Even if the EEOC finds no reasonable cause of discrimination – as it did in 65 percent of the charges resolved in 2015 – the person who filed the claim retains the option to file suit in court.

What is Employment Practices Liability (EPL)?

EPL coverage available through VGM Insurance Services protects against lawsuits based on claims of discrimination in the workplace, wrongful termination and more. EPL insurance can also protect against third-party liability to cover liability from customers, vendors or other third-parties.

In layman’s terms, it means you can be covered against loss or liability resulting from the claims made by people that work, have worked or want to work for you, as well as anyone you do business with and claims stemming from actions on behalf of the business or employees.

VGM Insurance Services offers a wide array of EPL coverage through leading insurance companies. Those partnerships also provide resources to answer your questions and address potential areas of risk. The goal is to make sure your business has workplace policies in place to handle problems or possible employment discrimination claims.


Proactively creating an employee handbook with enforceable policies – combined with training – can reduce risk by preventing the types of situations from which discrimination claims often arise, according to Society for Human Resource Management (SHRM).

VGMU Online Learning courses can be used to train employees during onboarding and for remediation when internal issues arise.

“It’s very easy to be proactive with education for your staff by customizing your educational offering with VGM Education,” said Paul DiMarco, president, VGM Education. “Compliance issues take on many faces. VGM Education provides a wide array of courses to cover these many types of issues and topics.”

The VGMU course HR006 - Managing Diversity discusses federal laws that apply to diversity in the workplace and the many ways employees and customers may be diverse. The three-part series, HR019 – Cultural Competence in Health Care, teaches your staff the many ways patients may be different, including culture, religion, age and communication style. Click here for more information about these courses.

How to find out more:

VGMU courses can be used to train all staff during your onboarding process or as part of your annual training. Not a VGMU user? Call Megan Kraft, internal sales and customer service manager, at 888-786-6628.

VGM Insurance Services provides EPL as part of our portfolio of full-line coverage offerings to protect your business. There are important differences between various insurance products that should be explained to you by professionals who understand your business and can advise you on the most effective plan of action. To learn more about EPL or the other coverages available through VGM Insurance Services, call 800-362-3363 or fill out the contact form on our website at

Article By Dorothy de Souza Guedes


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