Employment practice liability insurance (EPLI) is specialized insurance designed to protect against loss incurred in litigating and settling wrongful employment practices liability claims. It provides protection against lawsuits such as discrimination, breach of contract, and wrongful discharge suits, which usually are not covered by general business liability insurance. It generally provides reimbursement for the costs incurred in defending a lawsuit but does not cover reimbursement for any punitive damages awarded.
 

EPLI is not meant to replace sound and secure employment practices. In fact, most insurance companies will not insure a company unless it has some basic employment practices in place. Employee handbooks, post-incident investigation practices, and arbitration or mediation policies are some of the major items that insurance companies expect an employer to have when applying for an EPLI policy..