Employment Practices Liability (EPL) insurance protects a company and its directors, officers and employees for claims alleging employment-related wrongdoing.  Many companies assume that all EPL coverage is generally the same; however, the scope of EPL coverage may vary from policy to policy.  In addition, there are two new areas of law that employers should consider when reviewing their EPL policy – employer-mandated provisions of the Affordable Care Act (ACA) and recent legislation regarding social media.

Affordable Care Act exposure

Beginning January 1, 2015, employers with 100 or more employees must offer health insurance coverage to employees who work 30+ hours each week or 120+ hours in a month.  Noncompliance subjects employers to stiff penalties.  While the implementation and enforcement of the ACA is still riddled with uncertainty, employers will undoubtedly face new areas of potential liability exposure stemming from its mandates.  For example, the ACA permits plan participants and beneficiaries to utilize the enforcement provisions of ERISA to recover benefits, enforce rights or clarify rights under an ACA plan.

As employers seek to understand and comply with their obligations under the ACA, civil suits alleging violations of the ACA may trigger the company’s fiduciary liability, employee benefits liability or directors and officers (D&O) liability coverage.  Notably, some fiduciary liability insurers now offer defense coverage for plan sponsor (or settlor) conduct that may be beneficial to companies.  The whistleblower and anti-retaliation provisions of the ACA may likewise give rise to both potential civil liability and governmental investigations that may trigger the company’s EPL coverage or the defense provisions of a D&O policy.  Finally, employers that restructure their workforces to avoid or mitigate against ACA mandates may see new claims arising from those decisions.  Fiduciary liability policies may provide coverage or a defense benefit for settlor or plan sponsor function claims in connection with such lawsuits.


Employee privacy remains a hot topic, particularly in the social media context, with respect to both existing employees and job applicants.  In some jurisdictions, a potential employer may be liable for checking an applicant’s public Facebook profile and discovering information such as birth year, marital status, or gender of the applicant’s significant other, which cannot be considered in the hiring process.  Currently, 28 states have enacted, or are in the process of enacting legislation that prohibits an employer from asking or requiring an applicant or current employee to provide the employer accessibility to their social media or other accounts.  This type of legislation may also prohibit forcing an applicant or current employee to “friend” or connect with the employer or, in the employer’s presence, forcing them to log into their accounts.  These new laws may also protect applicants or employees from retaliation by the employer if they refuse to comply. The employer’s EPL policy may cover this type of liability, depending on the policy’s terms and definitions — in particular, the definition of Employment Practices Wrongful Act.


Below are questions employers should consider when reviewing the scope of their company’s EPL policy:

  • What types of employment-related risks are covered?
  • What kinds of risks are specifically excluded?
  • What kinds of claims are not mentioned and therefore not covered?

    Please contact a Gjording Fouser lawyer at 208.336.9777 if you would like any additional information about this topic or any other employment issues facing your company.