When searching for EPLI insurance cost estimates, many business owners expect a simple number. But the truth is, employment practices liability insurance pricing is as nuanced as the risks it covers. EPLI protects your company against employee lawsuits related to wrongful termination, harassment, discrimination, and other workplace claims—but how much you pay depends on your workforce, history, industry, and policy structure.

In this guide, we break down exactly what goes into EPLI pricing, what coverage levels mean, how to control costs, and what benchmarks to expect based on your company size.

Key Factors That Influence EPLI Premiums

There’s no flat rate for EPLI coverage. Premiums vary significantly depending on your company’s operations, legal exposure, and internal controls. Here are the core elements carriers assess.

Number of Employees

Your employee count is the first variable every insurer evaluates. More employees means more risk exposure, especially for harassment or wrongful termination. For example:

  • A business with fewer than 10 employees might pay $600–$1,200/year.
  • A company with 100+ employees could easily pay $8,000–$20,000 annually.

Industry Risk Profile

Some industries face higher EPLI claim rates. These include:

  • Healthcare & elder care: high turnover, sensitive duties
  • Hospitality & food service: customer-facing roles, hourly workers
  • Retail & franchises: young workforce, inconsistent oversight
  • Tech startups: rapid hiring, unclear HR processes

Claims History

A clean record can lead to favorable rates. But if you’ve had prior employee lawsuits—especially involving discrimination or retaliation—expect a steep rate increase or fewer carrier options.

HR Practices

Underwriters often ask for documentation of:

  • Anti-harassment training
  • Employee handbooks
  • Complaint reporting procedures
  • Disciplinary documentation policies

The more formalized and proactive your HR systems, the better your rate.

Location & State Laws

States like California, New York, and Illinois have more employee-friendly laws. In these jurisdictions, EPLI premiums are consistently 10–30% higher than in lower-risk states like Texas or Florida.

How EPLI Premiums Are Calculated—Behind the Scenes

While the final quote might feel arbitrary, EPLI premiums are calculated using a combination of structured underwriting factors and industry-specific risk modeling.

Key Inputs Underwriters Consider

Carriers evaluate:

  • Employee count and payroll: The larger your staff, the greater the exposure.
  • Industry classification (SIC/NAICS code): Risk-heavy sectors like hospitality and healthcare are flagged early.
  • Geography: Businesses in litigation-prone states like California or New York face base rate surcharges.
  • Claims history: Prior losses are often a deal-breaker or will lead to higher premiums and restricted coverage.
  • HR controls: Carriers review whether you have an employee handbook, complaint process, training documentation, and signed policies.
  • Automated vs Manual Rating
  • Small businesses are often rated through automated banding tools.
  • Mid to large-size companies may go through a manual underwriting process, which includes loss runs, claims questionnaires, and even broker-supplied narratives.

The more data you can provide to demonstrate that your HR and legal risks are under control, the more negotiating power your broker has to keep premiums reasonable.

How Coverage Levels & Deductibles Affect Premiums

Beyond the profile of your business, the way you structure your policy has a major impact on the cost. Higher limits and lower deductibles will cost more—but may also protect you better.

Understanding Limits

EPLI limits are usually expressed in a format like $1 million / $1 million, which means:

  • $1M per claim: the max payout for any single claim
  • $1M aggregate: the max payout for all claims in the policy year

Many businesses start with this base level, but high-risk companies may choose:

  • $2M / $2M
  • $5M / $5M (common in tech, healthcare, multi-location enterprises)

Higher limits = higher premiums, often increasing incrementally by $500–$1,000 per million in added coverage.

Deductibles and Retention

You’ll often choose between:

  • Deductibles: Paid after the insurer starts covering costs
  • Self-insured retentions (SIRs): You pay upfront before coverage begins

Higher deductibles or SIRs lower the premium but shift more risk to your business. Common ranges:

  • $5,000 – $25,000 for small business
  • $50,000+ for larger or riskier organizations

Defense Inside vs Outside Limits

In many policies, defense costs are included within the total limit. That means legal fees eat into what’s available for settlement. Choosing defense outside the limits may increase cost slightly—but ensures full indemnity remains available for damages.

Optional Endorsements That Add Cost

Customizing your policy to match your real risks can increase premiums. Common add-ons include:

  • Wage & hour defense: Often capped at $100K or less
  • Third-party liability: Covers vendor or customer claims
  • PAGA endorsements (in California): Expensive but necessary
  • Prior acts coverage: Important during transitions or acquisitions

Market Trends & Premium Inflation

EPLI pricing is not static. Several industry-wide trends are putting upward pressure on premiums and affecting how insurers underwrite risk.

Hardening Market Conditions

Since 2021, EPLI has been part of a “hard market,” where:

  • Underwriting is stricter
  • Premiums rise across the board
  • Fewer carriers are writing new EPLI business

Average renewal increases have ranged from 10% to 25%, even for clean accounts.

Social Inflation and Legal Trends

Jury verdicts in employment cases have ballooned. Factors include:

  • High-profile harassment and discrimination cases
  • Increased class-action and representative lawsuits
  • Litigation funding firms backing plaintiff lawsuits

This “social inflation” leads carriers to raise base rates and shrink available limits.

COVID-era Fallout

Pandemic layoffs, remote work disputes, and leave-related misunderstandings led to a spike in claims—especially around retaliation, failure to accommodate, and wage disputes.

Bundling Trends

Some insurers offer discounts for bundling EPLI with Directors & Officers (D&O) or Employment Practices Risk Management. This can lower cost and streamline claims handling.

Estimated Cost Ranges by Business Size

To give you a clearer picture, here’s what EPLI insurance typically costs based on company size and risk profile.

Solo and Micro Businesses (<5 Employees)

  • Cost: $500–$1,200/year
  • Usually limited coverage, defense only, and no wage/hour or third-party coverage

Small Businesses (5–50 Employees)

  • Cost: $2,000–$5,000/year
  • May include $1M/$1M limits with defense inside the limit
  • Wage/hour defense can be added in high-risk states

Mid-Size Companies (50–200 Employees)

  • Cost: $5,000–$20,000/year
  • Broader limits ($2M+), optional endorsements, prior acts coverage
  • Custom deductible/SIR structure becomes important

Larger Employers or High-Risk Categories

  • Cost: $25,000/year and up
  • Typically includes customized limit structures, third-party liability, and robust wage/hour protection
  • Carriers often request detailed underwriting submissions

How to Keep EPLI Cost Under Control

Premiums aren’t set in stone. Employers can take proactive steps to reduce or stabilize EPLI costs over time.

Strengthen Internal HR Controls

  • Maintain a well-documented employee handbook
  • Provide annual harassment and discrimination training
  • Implement a formal grievance and resolution policy
  • Conduct regular HR audits and manager coaching

These risk reduction steps can lead to lower underwriting scores and better rates.

Shop the Market

Working with a broker gives you access to:

  • Multiple carrier quotes
  • Tiered limit and deductible options
  • Market insights on favorable endorsements and exclusions

Bundle Strategically

Pairing EPLI with D&O, general liability, or management liability may earn carrier discounts and simplify claim coordination.

Review Defense Provisions Carefully

Ask whether your policy includes defense inside or outside the limit, and adjust if your budget allows. A policy with defense outside limits may cost 5–10% more, but can be worth it in the event of a large claim.

Customize Endorsements Based on Risk

Avoid over-insuring with unnecessary add-ons—but don’t skip wage/hour or third-party coverage if your industry demands it. A well-balanced policy matches your true exposure.

Navigating EPLI Cost & Coverage Complexity with Old Harbor

Understanding EPLI pricing is one thing—navigating the actual policy structures and state-specific risks is another. That’s where Old Harbor Insurance Services delivers real value.

Strategic Benchmarking and Custom Quotes

Old Harbor begins by reviewing your employee count, claims history, and industry risk to generate realistic premium benchmarks. They then shop across carriers to deliver competitive options based on your specific profile.

Tailored Policy Structuring

Their advisors help you:

  • Choose between deductibles and self-insured retentions
  • Decide on proper per-claim vs aggregate limits
  • Evaluate if defense outside limits is right for you
  • Select appropriate endorsements (wage/hour, PAGA, third-party, etc.)

They also flag common exclusions like contractor misclassification or limited prior acts coverage that could leave you exposed.

Ongoing Support That Reduces Cost Over Time

EPLI isn’t static. As your business grows or laws change, Old Harbor reviews and adjusts your policy accordingly—helping you avoid surprise premium hikes or unnecessary gaps.

If you’re serious about EPLI but don’t want to overpay or underinsure, Old Harbor is the partner to guide every decision with clarity and integrity.

Get Smart on EPLI Costs Before You Pay

The true cost of EPLI depends on more than just your employee count—it’s shaped by your risk, your protections, and the decisions you make around structure and endorsements. Employers who understand these variables can optimize their premiums, improve their defense posture, and avoid costly surprises down the line.

Whether you’re buying EPLI for the first time or reviewing your renewal, make sure you do it with expert guidance. Reach out to Old Harbor Insurance Services to get a clear, cost-effective strategy built around your business.