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Survey Report

Insurance Marketplace Realities 2021 – Employment practices liability

Talent|Workers Compensation

November 18, 2020

The Employment Practices Liability market has shifted to a hard market where underwriters are focused on many priorities.

Rate predictions

Rate predictions: Employment Practices Liability
  Trend Range
Primary (domestic markets): Increase (Purple triangle pointing up) +10% to +30%
Bermuda markets: Increase (Purple triangle pointing up) +15% to +25% with minimum retentions of $1m

Key takeaway

As the world continues to grapple with the COVID-19 pandemic and the social unrest, the EPL market has shifted to a hard market where underwriters are focused on the workforce impact of COVID-19, the financial health and stability of employers, and inclusion, diversity and equity initiatives.

COVID-19 impact has shifted a firming EPL market to a hard EPL market.

  • We are seeing continued pressure on primary retentions, especially in California. Expect separate retentions for California claims and for “highly compensated” employees.
  • As in other lines, excess EPL markets are following primary increases in addition to looking to correct increased limit factors (ILFs).
  • While some insurers in the London market have exited the EPL space, capacity remains stable in the U.S. and Bermuda — but expect some cutting back of limits domestically.
  • Underwriters are asking a significant number of questions related to COVID-19 furloughs, reductions in force, pay, reopening plans, etc. as well as conducting closer review of financials for private companies.
  • Coverage remains intact with limited COVID-19 exclusions added on a case-by-case basis.
  • While the COVID-19 pandemic is leading to employment claims involving issues such as discrimination, invasion of privacy and retaliation, not all clients and industries are experiencing such claim spikes. Use of analytical tools can help you identify the frequency and severity of claims within your industry.

Socially driven movements such as #MeToo, pay equity and Black Lives Matter are impacting employment practices liability litigation.

  • #MeToo claims are not coming in as frequently as they were during the earlier days of the movement.
  • There has been a shift to employee activism, in which employees are pushing their employers to take a stance on social issues.
  • Most recently, we have seen a further push for employers to focus on inclusion, diversity and equity in the wake of the Black Lives Matter movement, calling for zero tolerance of racial discrimination and racial inequities in the workplace.
  • These movements collectively and individually will continue to drive the rise in EPL claims. Expect to face more questions from underwriters about your organization’s inclusion, diversity and equity initiatives.

Increased privacy protections and increased potential for employee privacy violations are drivers of market conditions.

  • The Illinois Biometric Information Privacy Act (BIPA) has been the subject of many class action claims against organizations with employees in the state of Illinois. Based on our experience with these claims, losses from BIPA class action claims are in the millions.
  • Many EPL policies now have an exclusion for BIPA claims, with some expanding the exclusion even further to encompass all confidential information.
  • As businesses and offices reopen, many employers are collecting more information about employees (as part of symptom checking, contact tracing, temperature checking, COVID-19 testing, etc.) which may lead to more employee privacy claims and ADA claims.

State legislation is providing more protection for employees.

  • As society focuses more on inclusion, diversity and equity, states are implementing laws that provide broader protections to employees.
  • For example, some states have passed hairstyle discrimination laws, some have loosened the standard for sexual harassment claims, and some have extended the statute of limitations for harassment and discrimination claims.
  • These changes are driving some of the market hardening and putting pressure on retentions and limits.


Willis Towers Watson hopes you found the general information provided in this publication informative and helpful. The information contained herein is not intended to constitute legal or other professional advice and should not be relied upon in lieu of consultation with your own legal advisors. In the event you would like more information regarding your insurance coverage, please do not hesitate to reach out to us. In North America, Willis Towers Watson offers insurance products through licensed subsidiaries of Willis North America Inc., including Willis Towers Watson Northeast Inc. (in the United States) and Willis Canada, Inc.


Employment Practices Liability Thought and Product Leader,
FINEX North America

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