EPLI insurance cost is the one number most small-business owners guess wrong. A typical company with fewer than 50 employees pays around $2,665 per year — roughly $222 per month. However, the real range runs from about $800 a year for a low-risk firm with a handful of workers up to $5,000 or more for a mid-size company in a high-turnover industry. The price swings that much because carriers price EPLI almost entirely on your headcount, your industry, and your claims history.
What EPLI Insurance Cost Looks Like in 2026
Your headcount is the single biggest driver. Carriers price EPLI on a per-employee basis, typically $50 to $150 per worker per year. A five-person consulting firm and a 200-person restaurant chain live in completely different price brackets. The table below shows what businesses actually pay at each size tier.
| Employee Count | Annual Premium Range | Approximate Monthly Cost |
|---|---|---|
| 1–10 employees | $600 – $1,200 | $50 – $100 |
| 10–50 employees | $2,500 – $4,500 | $208 – $375 |
| 50–100 employees | $4,000 – $6,000 | $333 – $500 |
| 100–500 employees | $6,000 – $15,000 | $500 – $1,250 |
Industry matters almost as much. Healthcare businesses pay a median of about $409 per month because of high turnover and frequent patient-staff interaction. Consulting and professional-services firms average around $355 per month. Nonprofits, on the other hand, often pay just $92 per month. Retail, hospitality, and restaurants typically run 20% to 40% above the average for their headcount because fast hiring and firing cycles create more claim exposure.
| Industry | Median Monthly Premium | Median Annual Premium |
|---|---|---|
| Healthcare | $409/month | $4,908/year |
| Consulting / Professional Services | $355/month | $4,260/year |
| All Small Businesses (average) | $222/month | $2,665/year |
| Retail / Hospitality | $265 – $310/month | $3,180 – $3,720/year |
| Nonprofits | $92/month | $1,104/year |
About 36% of small businesses pay less than $150 per month for EPLI. In most cases, your EPLI insurance cost will fall somewhere in the $100 to $400 range monthly once you have 10 or more employees.
What Drives the Price Up or Down
Five factors control nearly all of your EPLI insurance cost. Understanding them helps you predict your quote before you even call a broker.
1. Number of employees. This drives roughly 80% of the premium calculation. More people means more potential claimants. 2. Industry. Healthcare, hospitality, and retail pay the most. Professional services and nonprofits pay the least. 3. Claims history. A single paid EPLI claim can triple your premium for three to five years. Even one claim on your record may push EPLI insurance cost up by 25% to 100%. 4.
Annual revenue. Businesses above $5 million in revenue typically see base premiums climb 25% to 40% compared to smaller companies with identical headcounts. 5. Location. California and New York premiums run 10% to 30% above the national average. California specifically adds a 25% to 40% surcharge because of its aggressive employment laws.
For example, a 20-person tech startup in Austin might pay $2,800 a year. That same company in Los Angeles could easily pay $3,600 to $3,900. Move it to healthcare staffing with prior claims, and EPLI insurance cost jumps past $6,000. As a result, getting quotes from at least three carriers is critical — the spread between the cheapest and most expensive offer is often 50% or more.
How to Get the Best Rate
The fastest way to cut your EPLI insurance cost is bundling. Adding EPLI as an endorsement to your existing Business Owner’s Policy can drop the price to as little as $400 per year. However, there’s a catch. BOP endorsements typically cap coverage at just $10,000 per claim. A standalone policy with $500,000 or $1,000,000 limits costs more but actually protects you. The average employment lawsuit defense alone runs about $120,000 — a $10,000 cap won’t even cover the attorney.
Raise your deductible to lower your premium. The standard deductible sits around $10,000. Pushing it to $25,000 can shave 15% to 20% off your annual EPLI insurance cost. That trade-off makes sense if your cash reserves can absorb a mid-five-figure hit. Also ask about pay-as-you-go billing, which ties your premium to actual payroll rather than year-start estimates. This keeps your EPLI insurance cost from ballooning during slow seasons.
Clean up your loss run. Carriers pull your claims history going back three to five years. If you’ve had claims, document what you fixed — new employee handbooks, anti-harassment training, updated termination procedures. Formal HR policies and complaint processes signal lower risk. Many carriers offer 5% to 15% premium credits for documented training programs. Finally, shop at least three carriers every renewal. EPLI pricing varies widely, and a broker who specializes in employment practices coverage often finds rates 20% to 30% below what a generalist quotes.
When This Coverage Is Required vs. Optional
No U.S. state legally requires businesses to carry EPLI. This is entirely optional coverage in all 50 states. Do not confuse it with workers’ compensation, which most states do mandate. However, “optional” does not mean “unnecessary.” The EEOC processed 88,201 new workplace discrimination charges in fiscal year 2025 and recovered $660 million for victims — the third-highest total in the agency’s 60-year history.
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| Scenario | EPLI Requirement | Why It Matters |
|---|---|---|
| Any business, any state | Not legally required | No state mandates EPLI |
| Federal contractors | Not required, but strongly expected | EEOC scrutiny is higher for federal contractors |
| Businesses with 15+ employees | Not required, but risk spikes | EEOC jurisdiction kicks in at 15 employees for most federal discrimination laws |
| California employers (5+ employees) | Not required, but premiums are 25–40% higher | State employment laws are the most plaintiff-friendly in the U.S. |
| Startups seeking investors | Often required by term sheets | VCs and institutional investors commonly require EPLI before funding |
Even with just one or two employees, you face exposure. Retaliation was the most-filed charge type for the 17th straight year in 2024, appearing in 47.8% of all EEOC charges. Harassment claims hit 40.4%. These are not exotic risks — they’re everyday employment disputes. The average cost to defend and settle one claim is roughly $160,000. For a small business, one lawsuit without EPLI can be existential. As a result, most brokers recommend EPLI once you hire your first W-2 employee.
Frequently Asked Questions
What does EPLI actually cover?
EPLI covers legal defense costs and settlements for claims like wrongful termination, discrimination, sexual harassment, retaliation, and wage-and-hour disputes. It typically pays for attorney fees, court costs, and judgments or settlements up to your policy limit. Most policies cover claims from current, former, and prospective employees.
Is EPLI insurance cost worth it for a business with fewer than 10 employees?
In most cases, yes. A small firm pays roughly $50 to $100 per month for EPLI. The average employment claim costs about $160,000 to defend and settle. Even one wrongful-termination allegation from a single disgruntled ex-employee can exceed what you’d pay in premiums over a decade. The math strongly favors carrying coverage.
Can I just add EPLI to my existing BOP instead of buying a standalone policy?
You can, and it’s cheaper — sometimes as low as $400 per year. However, BOP endorsements usually cap EPLI limits at $10,000 per claim. That won’t cover serious litigation. If you have more than 10 employees or work in a high-turnover industry, a standalone policy with $500,000 to $1,000,000 limits is typically worth the extra EPLI insurance cost.
Compare Quotes for Your Business
What you pay depends on your trade, your state, your revenue, and your claims history. The only way to know your real price is to compare several quotes side by side.
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Sources & How to Verify
The information on this page is drawn from official government and industry sources. Insurance requirements, premiums, and state rules change, so always confirm the exact figure with your state, a licensed agent, or the authority source.
- U.S. Small Business Administration: sba.gov — federal small-business insurance guidance
- Insurance Information Institute: iii.org — neutral premium and coverage data
- NAIC: naic.org — state insurance regulation data
- U.S. Department of Labor: dol.gov — workers’ compensation overview
- Your state DOI, workers’ comp board, and contractor-licensing board: search “[your state] department of insurance” or “[your state] workers comp” for the exact law and forms
Content last reviewed June 2026. If you notice outdated information, please contact us.
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Informational only — not insurance, legal, or tax advice. Business Insure Guide is an independent educational resource, not an insurance company, broker, law firm, or tax advisor, and this page does not provide insurance, legal, or tax advice. Requirements, premiums, and rules vary by trade, state, and insurer, and change over time. Always confirm the exact coverage, requirement, and price with a licensed insurance agent and your state before you buy. Verify with a licensed professional for advice about your specific situation.