Why Every Central Texas Business Needs Employment Practices Liability Insurance

Running a business is a rewarding journey—but let’s be honest, it’s not without its risks. While most business owners in Central Texas understand the importance of general liability and property insurance, there’s one crucial coverage that often gets overlooked: Employment Practices Liability Insurance (EPLI)If you have employees (or plan to), EPLI should be on your radar. Let’s break it down in simple terms and explain why this coverage is essential for businesses of all sizes.

What Is Employment Practices Liability Insurance (EPLI)?

EPLI is designed to protect your business from claims made by employees (past, present, or prospective) who believe their rights have been violated in the workplace. These claims can include:

• Wrongful termination – If an employee claims they were fired unfairly
• Discrimination – Claims based on race, gender, age, disability, or other protected categories
• Harassment – Including sexual harassment or hostile work environment allegations
• Retaliation – If an employee believes they were punished for reporting misconduct

Even if you run the most ethical, employee-friendly business in Texas, that doesn’t mean you’re immune to claims. In fact, small and mid-sized businesses are often more vulnerable because they may not have dedicated HR teams to handle compliance and legal issues.

Why Your Business Needs EPLI (Even If You Think You Don’t)

Many business owners assume that employment-related lawsuits only happen to large corporations. Unfortunately, that’s far from the truth. Here’s why EPLI is a must-have for businesses of all sizes:

1. Lawsuits Are More Common Than You Think
   Employee lawsuits are on the rise, and even a single claim—whether valid or not—can lead to hefty legal fees. Defending yourself in court can cost tens of thousands of dollars, even if you win.

2. Your General Liability Policy Won’t Cover It
   A common misconception is that general liability insurance covers employee claims. It doesn’t. General liability covers third-party claims (like customer slip-and-fall accidents), but employment-related claims require EPLI.

3. Texas is an At-Will Employment State (But That Doesn’t Mean You’re Safe)
   Texas businesses operate under at-will employment, meaning you can generally fire an employee at any time. However, that doesn’t mean an employee can’t claim wrongful termination, discrimination, or retaliation. Even if the claim is baseless, defending yourself in court is costly and time-consuming.

4. EPLI Helps Protect Your Reputation
   An employment lawsuit can do more than drain your bank account—it can damage your business’s reputation. Having EPLI means you have the resources to handle claims professionally and discreetly.

What Does EPLI Cover (and What Doesn’t It Cover)?

EPLI policies typically cover:

• Legal fees (attorney costs, court expenses, settlements)
• Judgments or settlements (if your business is found liable)
• Claims from employees, applicants, or former employees

However, EPLI does not cover:

• Criminal acts (like intentional fraud or illegal activity)
• Workers’ compensation claims
• Wage and hour disputes (like unpaid overtime claims)

How Much Does EPLI Cost?

The cost of EPLI depends on factors like:

• The size of your business
• Your industry (some industries face higher risks than others)
• Your past claims history
• The coverage limits you choose

For a small business, EPLI coverage can start as low as a few hundred dollars per year—far less than the cost of defending a lawsuit.

How to Get EPLI for Your Business

If you’re ready to protect your business from employment-related risks, the first step is to talk to an experienced insurance agent. At Dowd Insurance Agency, we specialize in helping Central Texas businesses find the right coverage at the best price.

Give us a call or request a quote today—we’re happy to answer your questions and help you safeguard your business from unexpected employment claims.