Employment practices liability remains a competitive market for buyers, according to Alex Ilkos (pictured), client executive, professional services, at Purves Redmond Limited, though growing claim complexity and the prospect of rising unemployment could put more pressure on both employers and insurers ahead.
Capacity remains available and pricing has held relatively stable, Ilkos said, particularly for well-managed organizations with a clean loss history.
"There's definitely some room there to get more competitive terms on renewal,” Ilkos told Insurance Business.
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He described the current market as balanced, not tilted in either direction.
"We're in a good spot right now," Ilkos said. "It's not overly aggressive one way or another, but fairly strong."
Looking ahead, Ilkos flagged the broader economic environment, and unemployment specifically, as a factor that could shift that stability.
"The thing I would note, and this is more of a future view, is the economic environment, especially unemployment," Ilkos said.
His reasoning: when jobs are harder to find, employees who lose a position, or who feel passed over for a promotion, have fewer alternatives and less to lose by pursuing a claim.
"People are more upset when they lose their job," Ilkos said. "Any sort of difficulty with your career, there's a bigger spotlight on it because it's harder to find a new opportunity."
An employee confident they could land an equivalent role elsewhere is less likely to escalate a dispute, according to Ilkos, who offered a rough illustration of the mindset: someone who believes they could get the exact same job at 18 different places has little reason to fight over losing one of them. That calculus changes as the job market tightens, he said, making current and former employees alike more willing to bring a claim forward when they feel they've been wronged.
Employers consistently underestimate how expensive an EPL claim can be to defend, according to Ilkos, regardless of how the underlying allegation is ultimately resolved. That dynamic holds true across most liability policies, he said, but it's especially pronounced in EPL.
"I think this is similar to every single policy, to be honest, but EPL especially," Ilkos said. "I think employers always underestimate how expensive a claim can be from a defence-cost perspective."
Not every claim is becoming more complex, according to Ilkos, but the ones that do tend to generate significantly higher defence expenses as a result.
"If things are complex, employees want to push things further, and there's a lot of details to figure out, defence costs will go up, which costs money," Ilkos said.
Even employers with strong procedures in place aren't immune, according to Ilkos, who said meritless claims still have to be defended even when an employer is confident it did nothing wrong, and confidence in the outcome doesn't make the legal bill any smaller.
"We've seen completely frivolous claims where someone is just upset that they lost their job," Ilkos said. "And if they are stubborn in that sense, there are going to be defence costs. Even if you end up being right in the end and you don't have to pay any damages, defence costs can be very high."
The biggest misconception employers carry into a policy, according to Ilkos, is assuming EPLI exists purely to cover wrongful termination claims.
"I think that's what everyone thinks when they think of EPL," Ilkos said. "But in reality, it can respond to a much broader range of allegations."
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That includes discrimination, harassment and retaliation, he said, and coverage can apply even when an employee never actually leaves the organization. Ilkos said he's handled situations where an EPL claim arose without any termination involved at all, extending into privacy-related issues around how internal information is handled.
"There are situations where an employee has not left the organization where there's an EPL claim," Ilkos said. "Privacy concerns as well, if information was shared that shouldn't have been around the office."
"It's not just a wrongful termination coverage," Ilkos said. "It can involve any employment-related issue.”
