EPLI Insurance in Arizona
We provide EPLI Insurance solutions to businesses in Arizona and beyond.
EPLI Insurance at Palomino Insurance Agency
What is EPLI insurance and who may need it?
If you run a business, you face the constant risk of employees filing lawsuits against you. That is where EPLI insurance comes in. This coverage, formally known as employment practices liability insurance, protects business owners from claims made by workers alleging violations of their legal rights.
Depending on policy terms, EPLI can help cover legal defense fees, settlements, and judgments for allegations such as wrongful termination, sexual harassment, and discrimination. Contract-related claims may be limited or excluded. Even if a claim is completely baseless, the legal costs to defend your business can be financially devastating.
Arizona businesses with employees should consider this coverage. Applicable employment laws and risks vary with workforce size and other factors. Business owners often assume their general liability policy covers these disputes, but it almost never does. Appropriate employment lawsuit protection can help manage the financial impact of a covered human resources dispute, subject to policy limits, deductibles, and exclusions.
Real world example of employment lawsuit protection in action in Arizona
Workplace disputes happen more often than many employers realize. According to the Mesch Clark Rothschild law firm, workers filed 1,729 charges of discrimination with the EEOC in Arizona during fiscal year 2019.
When an employee in Arizona files a formal complaint for retaliation or wrongful termination, the employer should seek appropriate legal guidance and promptly notify its insurer. Without applicable coverage, the business may have to pay defense costs out of pocket.
Below is a data snapshot highlighting the reality of these claims for businesses operating in the state.
| Metric | Data Point |
|---|---|
| EEOC charges filed in Arizona (FY 2019) | 1,729 charges |
| Most common national EEOC claim (2022) | Retaliation (51.6%) |
| Average closed EPL claim cost with payments, Travelers private and nonprofit insureds (2025) | Nearly $125,000 |
The 1,729 charges figure comes from Mesch Clark Rothschild, while the 51.6% retaliation statistic is cited by Maynard Nexsen. The nearly $125,000 average cost per closed EPL claim with payments for its private and nonprofit insureds in 2025 is reported by Travelers.
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Pricing table around the cost of EPLI insurance in Arizona
The cost of EPLI insurance varies based on your company size, industry, and claims history. Insureon’s customer data provides a national reference point, not an Arizona average or a personalized quote.
According to Insureon, its small business customers pay a median premium of $257 per month for this coverage. It reports that most businesses pay around $750 to over $14,000 per year, depending on their risks.
Below is a pricing table showing the distribution of monthly premiums paid by small business customers.
| Monthly Premium Range | Percentage of Customers |
|---|---|
| Less than $200 per month | 38% |
| Between $200 and $400 per month | 33% |
| More than $400 per month | 29% |
The 38% and 33% figures in the pricing table above are sourced from Insureon based on its analysis of small business policies. The remaining 29% is calculated as 100% minus 38% minus 33%; percentages are rounded.
What you need to consider when looking for EPLI insurance coverage and its limitations
When shopping for EPLI insurance, you have to look closely at the policy limits and deductibles. If you choose a low coverage limit to save money on your premium, you might not have enough funds to cover a major lawsuit. You also need to understand exactly what the policy excludes.
Standard EPLI often excludes wage and hour claims, such as unpaid overtime or minimum wage disputes. Some insurers offer limited defense-cost coverage by endorsement, but that does not necessarily cover unpaid wages, settlements, or penalties. Ask your agent what is available and excluded.
Additionally, this coverage does not pay for bodily injury or property damage. If a worker gets physically hurt on the job, that falls under workers compensation. You should also ask your agent about prior acts coverage. EPLI is generally written on a claims-made basis. Review the retroactive date, prior-acts provisions, reporting requirements, and exclusions for known circumstances; acts before the policy starts are not automatically covered.
Comparison table showing other coverages used with employment lawsuit protection
Because EPLI insurance has specific limitations, business owners in Arizona need to build a complete insurance package. You should never rely on just one type of policy to protect your company from all legal risks.
Businesses may combine employment lawsuit protection with other commercial policies. Each policy addresses different risks, but a claim excluded by one policy is not automatically covered by another; review the terms and potential gaps with your agent.
Here is a comparison table showing how different policies work together to protect your business.
| Insurance Coverage | What It Covers |
|---|---|
| EPLI insurance | Lawsuits related to wrongful termination, discrimination, and harassment. |
| General liability | Third-party bodily injury, property damage, and advertising injury claims. |
| Workers compensation | Medical expenses and lost wages for employees injured on the job. |
| Directors and officers (D&O) | Lawsuits alleging mismanagement or breach of fiduciary duty by company leaders. |
Statistics about EPLI insurance in Arizona
Operating a business without appropriate coverage can create substantial financial risk. Employment disputes are costly, and jury awards can easily force a small company into bankruptcy. Understanding the numbers helps illustrate why employment lawsuit protection is so critical.
Employment-related settlements and judgments can be costly, but outcomes vary widely by the allegations and facts of each case. Businesses should review their financial exposure and coverage limits with an insurance professional.
Defense costs can arise even when an employer successfully contests a claim. Separately, as reported by Travelers, the average cost per closed EPL claim with payments for its private and nonprofit insureds was nearly $125,000 in 2025, 32% higher than in 2020. EPLI can help pay covered costs, subject to policy limits, deductibles, exclusions, and other terms.
Who this coverage is designed for and getting started
This coverage is designed for any business owner in Arizona who has employees on their payroll. Small retail shops and large manufacturing facilities can both face employment claims, but their exposures and applicable legal requirements differ. No employer is immune to allegations of discrimination or wrongful termination.
Palomino Insurance Agency can help you explore EPLI insurance in Arizona and compare policy limits, exclusions, and deductibles for your business.
If you are ready to explore employment practices liability insurance for your Arizona business, we can help. Contact us today to discuss your coverage needs and request a quote.
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15169 N Scottsdale Rd, Suite 205
Scottsdale AZ 85254
Phone: 480-483-8000