Employment Practices Liability Insurance

Headcount is the base, then industry, claims history, retention, and limit. Two things carry extra weight for a California employer. Underwriters look closely at wage and hour practices, because that is where the largest claims begin even though the policy usually excludes them. They also ask what documentation exists: the written policy, the training records, the handbook, and how complaints are investigated. EPLI generally costs more in California than in most other states. That reflects the breadth of the labor code, the size of jury verdicts here, and settlement history in this state, rather than any one carrier’s method.

It depends on how your form defines a claimant. Many EPLI forms name employees, former employees, applicants, and interns, and some reach contractors only by endorsement rather than in the base form. The exposure exists either way, because California’s harassment protections extend to a contractor providing services and not only to a payroll employee. Classification is the other half of it, since a worker treated as a contractor may later be found to be an employee. Check the definitions page of your own policy, and we can review it with you.

No. The policy is not required, but the duties behind the claims are. Under the Fair Employment and Housing Act, the discrimination provisions reach employers with five or more employees. The harassment provisions apply to a workplace of any size, including one with a single employee or contractor. Complaints go to the California Civil Rights Department, and a complainant may request an immediate right-to-sue notice and file in court. FEHA does not carry the federal statutory damage caps, which is part of why severity runs higher here. Current as of August 2026.

Most of what underwriters ask about, California already requires. An employer with five or more employees must provide sexual harassment prevention training every two years, two hours for supervisors and one hour for everyone else, under Government Code 12950.1. A written harassment, discrimination, and retaliation policy is required at the same threshold under 2 CCR 11023. Government Code 12940(k) then imposes a duty to take all reasonable steps to prevent harassment, and a prompt, documented investigation is how that duty is met. Requirements stated here are current as of August 2026.

Bodily injury, property damage, and professional errors sit elsewhere, usually on general liability or professional liability. The exclusion that matters most in California is wage and hour, which is either excluded outright or carried back by an endorsement that pays defense costs only and never the wages themselves. Punitive damages awarded against an insured are not insurable here either, so no limit pays that portion of a verdict. Forms differ in the wrongful acts they list, so read the list on yours.