Employment Practices Liability Insurance (EPLI) Calculator

About This Employment Practices Liability Insurance (EPLI) Calculator

This Employment Practices Liability Insurance (EPLI) calculator is designed to help employers estimate an appropriate coverage limit for claims related to wrongful termination, discrimination, harassment, retaliation, and other employment-related issues. It gives an educational starting point for a coverage discussion, not a quote or guarantee.

EPLI is commonly purchased by small, mid-sized, and large employers that want financial protection from the legal defense costs, settlements, or judgments that can arise when employees (or applicants) allege improper employment practices. Even a single serious claim can be expensive, so understanding your potential exposure is an important part of risk management and insurance planning.

What This EPLI Calculator Does

The calculator focuses on two core drivers of employment practices risk:

• Number of employees — the size of your workforce (full-time and part-time) is a primary driver of how many employment-related incidents could occur.
• Past EPLI claims count — a history of prior EPLI-type claims can indicate elevated risk going forward, and many insurers treat this as an important underwriting factor.

Based on these inputs, the tool produces an estimated coverage limit range (for example, “$500,000 to $1,000,000”). This is meant to be a directional guide you can compare against your current EPLI limits and use as a talking point with an insurance professional.

The calculator does not produce a premium quote, binding indication, or coverage recommendation. Actual insurer quotes will incorporate far more detailed information about your organization, HR practices, industry, and loss history.

How the EPLI Estimate Is Calculated

The underlying logic uses a simplified, conceptual model. At a high level, the estimate is driven by:

• how many people you employ,
• an assumed average potential loss per employee for a serious claim, and
• a risk adjustment factor that reflects your organization’s past claim experience.

You can think of the estimated coverage limit, E, as being calculated using this type of relationship:

Where:

• E = estimated EPLI coverage limit
• N = number of employees (from the Number of Employees field)
• L = assumed average potential loss per employee for a serious employment practices claim
• R = risk adjustment factor based on simplified claim history (for example, the Past EPLI Claims field)

The exact numeric values of L and R inside this specific calculator are simplified and generalized for educational use. Real-world underwriting often uses more granular data by job type, location, turnover rates, HR controls, and other factors that are beyond the scope of this tool.

How to Use the EPLI Calculator

1. Enter your Number of Employees.
   • Include both full-time and part-time employees on your payroll.
   • If your workforce fluctuates, use a reasonable average over the past 12 months.
   • If you operate across multiple locations, combine employees from all locations into a single total.
2. Enter your Past EPLI Claims.
   • Count formal claims or lawsuits related to wrongful termination, discrimination, harassment, retaliation, or similar employment practices issues.
   • You can typically look back over the last 3–5 years, or the period your broker or insurer focuses on when discussing losses.
   • If you have had no prior claims, enter 0.
3. Click the Calculate button.
   • The calculator will display an estimated EPLI coverage limit or range based on your inputs.
   • Use this as a benchmark to compare with your current policy limits.

Interpreting Your Results

When you run the calculator, you will typically see an output such as:

• Estimated EPLI coverage limit: $500,000 – $1,000,000

Here is one way to interpret this type of result:

• The lower end of the range represents a minimum level of protection suggested by the simplified model for an organization of your size and claim profile.
• The upper end of the range represents a more conservative level of protection that might be considered if you have higher risk tolerance concerns, operate in more litigious environments, or expect rapid growth.

This output does not mean that losses will be limited to that amount, nor that you are likely to experience claims of that size. Instead, it offers a starting benchmark for coverage discussions. It may be appropriate to buy limits below or above this range depending on your budget, risk appetite, contractual requirements, and broader insurance program.

Worked Example

The example below illustrates how a hypothetical employer might use this tool.

Scenario: A professional services firm has 75 employees and has experienced 1 employment practices claim in the last 5 years.

1. The HR manager enters 75 in the Number of Employees field.
2. The HR manager enters 1 in the Past EPLI Claims field.
3. After clicking Calculate, the tool shows an estimated EPLI coverage range of $750,000 to $1,500,000.

The firm then:

• Checks its current EPLI policy and sees that the limit is $500,000.
• Notes that the current limit is slightly below the lower end of the indicated range.
• Brings this information to its insurance broker to discuss whether an increase to $1,000,000 or more is appropriate, taking into account budget, contract needs, and any upcoming changes in staffing.

This example is merely illustrative and does not imply that firms with similar profiles should or must carry the same limits. It shows how to use the calculator output as a conversation starter rather than a final answer.

What EPLI Typically Covers

While policies and carriers differ, EPLI policies often respond to allegations such as:

• Wrongful termination, constructive discharge, or failure to promote.
• Workplace harassment, including sexual harassment and hostile work environment claims.
• Discrimination based on a protected class (for example, age, race, gender, disability, religion, or national origin).
• Retaliation against employees who assert their rights, report concerns, or file complaints.
• Certain types of employment-related defamation, invasion of privacy, or misrepresentation, depending on policy wording.

Some exposures may be excluded or limited by endorsements, sublimits, or other policy terms. It is important to review your specific policy with a qualified insurance professional.

Comparison: Inputs vs. Real-World Underwriting

The table below summarizes how this calculator’s simplified approach compares to common underwriting practices used by insurers.

What to Do With Your Estimate

Once you have an estimated EPLI coverage limit from the calculator, consider the following next steps:

• Compare to your current policy. Review your existing EPLI limit, any sublimits, and retention or deductible amounts.
• Discuss with an insurance professional. Share the output and your organizational details with a licensed agent or broker who can provide tailored guidance.
• Review HR and compliance practices. Strong policies, training, and documentation can reduce both the likelihood and severity of employment-related claims.
• Plan for growth or change. If you anticipate significant hiring, acquisitions, or organizational restructuring, you may want to consider higher limits than the current snapshot suggests.

Important Assumptions & Limitations

This EPLI calculator is intentionally simplified and is subject to the following important assumptions and limitations:

• Educational use only. The results are for general informational and educational purposes and are not legal, financial, or insurance advice.
• Not a quote or guarantee. The calculator does not provide a premium quote, policy offer, coverage guarantee, or recommendation to buy, sell, or change any insurance product.
• Simplified methodology. The model uses generalized assumptions about claim frequency and severity. It cannot account for all factors insurers may consider, including industry nuances, jurisdiction, HR practices, unionization, or contractual obligations.
• Limited inputs. Only employee count and past claim count are captured. Actual underwriting typically requires much more detailed information.
• No prediction of future events. The calculator does not predict whether claims will occur or what amounts they may involve.
• Policy terms vary. Actual coverage is governed solely by the terms, conditions, exclusions, and endorsements of your specific policy, which may differ materially from the assumptions used here.

You should consult qualified legal and insurance professionals before making decisions about coverage limits, risk management strategies, or HR policies.

Content Basis and Review

The conceptual framework used in this calculator is based on common insurance risk management practices, such as scaling potential exposure with workforce size and adjusting for past loss experience. However, it does not replicate any single insurer’s proprietary model. For regulated insurance decisions, always rely on current materials and advice from licensed professionals familiar with your organization and jurisdiction.