Resources & Insights

Navigating Employment Liability Insurance in the Hospitality Industry

November 14, 2023

Kevin Shafer
Insurance Advisor

Employers constantly face workforce risks and challenges in the fast-paced hospitality industry. Employment liability issues, such as wrongful termination, harassment, discrimination, and wage disputes, can quickly escalate into expensive legal battles.

While most industries experience 10-15% turnover every year, it’s estimated that the hospitality industry faces 70-80% annual turnover. With a high number of employees joining and leaving hospitality jobs, understanding and leveraging employment liability insurance is essential.

What is Employment Liability Insurance?

Employment liability insurance, commonly known as Employment Practices Liability Insurance (EPLI), is a specialized coverage designed to protect employers from legal claims made by employees or former employees.

These claims can include allegations of discrimination, harassment, wrongful termination, and other employment-related issues. EPLI is essential for the hospitality industry, where interactions between employees and guests are frequent, and potential legal risks are higher.

What do EPLI policies cover?

EPLI policies generally cover various employment-related claims, including:

  • Discrimination: Protection against claims of discrimination based on race, gender, age, disability, or other protected characteristics.
  • Harassment: Coverage for claims of sexual harassment, hostile work environment, or any form of workplace harassment.
  • Wrongful Termination: Legal defense and potential settlement costs when an employee alleges unjust termination.
  • Wage and Hour Disputes: Coverage for claims related to unpaid wages, overtime violations, or other wage disputes.
  • Retaliation: Protection in cases where an employee alleges retaliation for reporting wrongful conduct or participating in legal proceedings.

Why is EPLI especially important in hospitality?

The hospitality industry is particularly vulnerable to employment liability claims for many reasons, including:

  • Guest and Employee Interactions: The constant interaction between employees and guests can lead to a higher likelihood of harassment or discrimination claims.
  • Seasonal and Temporary Staff: The hospitality industry often relies on seasonal and temporary staff, making compliance with employment laws more challenging.
  • High Turnover Rates: Frequent employee turnover can increase the risk of wrongful termination claims.

How do changing employment laws impact EPLI?

Staying ahead of ever-evolving employment laws is a challenge (and something your employment lawyer should keep you up-to-date on). New laws mean new risks, and you need to ensure your policy covers any legal updates.

Colorado made several significant employment law changes last year, including:

  • Mandating salary ranges and employee benefits in job postings
  • New laws related to internal announcements of new hires
  • Additional reasons for employees to use paid sick leave
  • Elimination of the “severe or pervasive” standard of proof for harassment cases

As employees and employers navigate these new laws, issues will arise – and that could lead to litigation.

How do employers know what type of coverage they need?

EPLI policies can be tailored to meet the specific needs of hospitality employers, and our team is here to help. We can create an insurance strategy that meets your needs and protects your business from employment-related issues.

Customized coverage is an essential step in ensuring your business is adequately protected, so reach out to CCIG at any time. We can have a conversation about your needs and structure a plan that covers you today and in the future. Reach out to Kevin at

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