EPLI Claims Continue to Rise: What Employers Need to Know in 2026
Employment Practices Liability Insurance (EPLI) claims are becoming one of the most significant risks facing employers today. From discrimination and retaliation allegations to wrongful termination and harassment claims, organizations are facing a growing number of workplace disputes and higher costs when those disputes result in litigation.
Recent data suggests this trend is unlikely to slow anytime soon.
EPLI Claims Are Increasing
According to Travelers, more than 7,600 EPL claims were submitted in 2025, with nearly 60% involving allegations of workplace discrimination. At the same time, more than 60% of claims were brought by former employees following termination or layoff decisions. https://www.travelers.com/business-insurance/professional-liability-insurance/employment-practices
The trend extends beyond insurance claims data. The U.S. Equal Employment Opportunity Commission (EEOC) received 88,531 discrimination charges during fiscal year 2024, an increase of more than 9% from the previous year and one of the highest filing levels in recent years. The agency also recovered nearly $700 million for workers alleging workplace discrimination.
For employers, these numbers serve as a reminder that workplace decisions are increasingly being challenged through administrative complaints and litigation.
The Cost of Claims Continues to Climb
Not only are EPL claims becoming more common, but they are also becoming more expensive.
Traveler’s reports that the average cost of a closed EPL claim with payment was nearly $125,000 in 2025, representing a 32% increase since 2020. Several claims closed with settlements exceeding $1 million.https://image.email.travelers.com/lib/fe5f15707c62007a7410/m/1/330104b1-5dee-4501-8a6a-83df82f028b4.pdf
The litigation environment has also become more challenging. Recent employment litigation research found that the average employment plaintiff verdict reached $5.1 million in 2024, more than double the prior year’s average.
Rising legal fees adds additional pressure. Data from the Bureau of Labor Statistics shows labor and employment legal service costs have steadily increased in recent years, contributing to higher defense expenses for employers facing claims.
Real-World EPL Claims Show the Stakes
Recent employment verdicts demonstrate just how costly EPL claims can become.
In California, a former chief nursing officer was awarded $27.5 million after a jury found her employer retaliated against her for repeatedly raising patient safety concerns. The lawsuit alleged the employee faced adverse treatment after reporting safety and compliance issues within the hospital system. The verdict included both economic and compensatory damages.
In another California case, a former police officer received a $10 million jury award after alleging gender discrimination, sexual orientation discrimination, harassment, retaliation, and a hostile work environment. Jurors found the employer liable after hearing evidence regarding workplace culture, management conduct, and the handling of employee complaints.
These cases are noteworthy because they illustrate exposures that many employers face every day. Retaliation allegations, discrimination complaints, and failures to address workplace concerns can quickly escalate into lengthy litigation and substantial verdicts.
The Claims Employers Are Most Likely to Face
While EPL claims can take many forms, several allegations consistently drive most of the activity:
- Discrimination
- Wrongful termination
- Retaliation
- Harassment
- Failure to accommodate disabilities
- Hostile work environment allegations
Retaliation and disability-related claims continue to be among the most frequently reported allegations received by the EEOC. Employers are also seeing increased accommodation requests, particularly involving mental health conditions, creating new compliance and employment-law challenges.
Why Employers Should Pay Attention
Several factors are contributing to today’s heightened EPL exposure:
More employee awareness. Employees are increasingly knowledgeable about workplace rights and reporting channels.
Social inflation. Larger jury awards and growing public sympathy for plaintiffs continue to drive higher settlements and verdicts.
Workplace changes. Remote work, accommodation requests, evolving employee expectations, and workforce turnover have created new management challenges.
Increasing legal costs. Even claims that are ultimately resolved in an employer’s favor can generate substantial defense expenses.
Reducing EPL Risk
While no organization can eliminate EPL exposure entirely, employers can take proactive steps to reduce risk:
- Maintain thorough documentation of employment decisions.
- Apply workplace policies consistently.
- Train supervisors on discrimination, harassment, and retaliation issues.
- Promptly investigate employee complaints.
- Review termination decisions carefully.
- Keep employee handbooks and policies updated.
- Consult employment counsel when handling high-risk personnel matters.
Because a single claim can result in significant defense costs, settlements, or verdicts, many organizations also look to EPL insurance as part of their overall risk management strategy. Travelers notes that EPL coverage can help address defense costs, settlements, and verdicts associated with covered employment-related claims.
Final Thoughts
The employment liability landscape continues to evolve. Rising EEOC activity, escalating litigation costs, and increasing verdict amounts are creating greater exposure for employers across virtually every industry. Employers that invest in strong HR practices, manager training, and appropriate insurance protection will be better positioned to navigate these challenges and protect their organizations from costly EPL claims.
The takeaway is simple: one employment decision can lead to years of litigation and significant financial consequences. As EPL claims continue to rise, employers should evaluate whether their risk management practices and insurance programs are keeping pace with today’s workplace realities.
Contact Connie Phillips Insurance for more information or a quote. https://www.insurance-financial.net/commercial-insurance/