The short answer
EPLI insurance (employment practices liability insurance) protects your nonprofit when an employee, former employee or job applicant claims you violated their rights at work, like wrongful termination, discrimination, harassment or retaliation. It pays your legal defense, plus settlements or judgments, up to your policy limit. General liability doesn’t cover these claims.
Let’s say a staff member you let go last spring files a discrimination complaint. Even if you did everything by the book, you now need an attorney. That’s what EPLI insurance is for.
What Is EPLI?
EPLI stands for Employment Practices Liability Insurance. You’ll also hear it called EPL insurance; it’s the same coverage. It covers claims about how you hire, manage and let people go. If someone claims you fired, passed over or mistreated them unlawfully, EPLI is the policy that steps in.
Here’s the part people miss: it responds even when a claim has no merit. Defending a claim you eventually win still costs real dollars. Your general liability insurance won’t help here. It covers injuries and property damage, not employment decisions.
What Is EPLI Coverage?
EPLI coverage pays to defend and resolve claims about how you treat employees and job applicants, whether the claim has merit or not. Most policies cover the five claim types below and exclude bodily injury, intentional acts, fines and most wage-and-hour disputes.
Employment law isn’t anyone’s idea of light reading (mine included, and I do this for a living), so here’s the short version.
Usually covered
- Wrongful termination
- Discrimination based on age, race, sex, disability or another protected trait
- Sexual harassment or a hostile work environment
- Retaliation against someone who complained
- Failure to hire or promote
Usually excluded
- Bodily injury
- Intentional acts
- Fines
- Most wage-and-hour disputes, meaning unpaid overtime or minimum wage claims
One detail seems minor but matters a lot. Defense costs usually come out of your limit. Spend $200,000 on attorneys, and a $1 million limit has $800,000 left for a settlement.
| Situation | Policy that usually responds |
|---|---|
| A former employee says they were fired for reporting harassment | EPLI |
| A guest slips and falls at your fundraiser | General liability |
| A donor sues the board over how restricted funds were used | Directors and officers (D&O) |
EPLI Claims Examples
Retaliation
Retaliation after a falling-out.
In a real nonprofit claim, a museum fired an actor who had reported harassment. The museum hadn’t documented the actor’s performance problems, so the firing looked like retaliation. EPLI responded, and the claim was resolved before trial.
Volunteers
A volunteer pushes back.
A volunteer removed from a leadership role after reporting misconduct alleges retaliation.
Hiring
A hiring decision is challenged.
A rejected applicant files a disability charge with the EEOC, the federal agency that handles workplace discrimination complaints.
Why Nonprofits Need EPLI
Here’s the bottom line: good intentions don’t make you immune.
88,201
new discrimination charges filed with the EEOC in fiscal year 2025
6 in 10
of those charges alleged retaliation
94%
of nonprofit D&O claim dollars came from employment allegations, in an analysis of 1,500+ claims
In my opinion, volunteers are the detail nonprofits overlook most often. Three things worth doing this week:
- Write down performance issues when they happen.
- Ask whether volunteers are covered, both as insureds and as people who can bring a claim.
- Ask whether your policy covers harassment claims from clients or visitors.
EPLI FAQs
How much does EPLI cost for a nonprofit?
There’s no one-size-fits-all number. Your price depends on headcount, claims history, your limit and your HR practices. The quickest way to get your real number is to ask us.
Is EPLI included in nonprofit D&O insurance?
Often, but not always. Many directors and officers (D&O) packages include it; others sell it separately. Check your declarations page, the summary at the front of your policy.
Is EPLI required by law?
No. But some grants and government contracts ask for proof of coverage.
About the author
Parker Berman is co-founder of Nonprofit Insuror South. He has worked in commercial property and casualty insurance since 2017, with a focus on nonprofits, and holds a B.B.A. in Risk Management and Insurance from the University of Georgia.
Not sure where you stand?
Give us a call, and we’re happy to take a look at your employment practices liability insurance.