Throughout 2021 the employment practices liability (EPL) market saw premium and retention increases between 10-25%, with underwriters increasing prices to remain profitable.

According to a 2021 market overview, primary EPL insurers were not interested in writing new EPL coverage, and their appetite was about 10-15 insurers. Because of EPL insurers hesitation to take new clients, there was an increase in retention. premium rates creeped up by 10-25%, triggering challenging market conditions. 

In the past five years there has been an increase in categories of employment litigation that can affect companies and cause more EPL claims. Between COVID-19 and various social media movements such as Black Lives Matter, #TimesUs, and #MeToo, there is more ground that EPL insurers must take on. 

The Current Market

When EPL underwriters shored up their capacity allocation and risk selection in 2021, the market began to improve. Between the market competition increase and the general market conditions, premium increases are projected to be flat to +10% for renewals in 2022. Although the market does seem to be looking up, it is important to remember that EPL claims can at times take four or five years to officially begin, meaning COVID-19 related claims may hit the market once again in the future. Claims related to workplace environment and vaccine mandates are the main culprits when it comes to COVID-19 related claims. Despite COVID-19 related complaints having increased, the Equal Employment Opportunity Commission (EEOC) stayed stable in 2021, noting there was no big difference in the number of resolutions or charges. 

Other than the changes incurred from COVID-19, there are other areas of concern related to the EPL market such as: new exclusions for biometric privacy acts, new legislation removing forced mediation, increase in age discrimination related losses, and wage and hour coverage challenges. 

The EPL market is expected to continue moderating throughout 2022, despite the recent challenges it has faced. With the EPL market being constantly in flex, it is important to have an expert broker that can help guide you through the changes.  You can always have a confidential conversation with us, if you’d like to discuss protecting your business.