The employment claims hitting businesses hardest right now fall into three categories: retaliation, which has been the single most common basis in EEOC charges every year since 2009 and now appears in more than half of all charges filed; harassment, which carries the largest settlements and the heaviest reputational cost; and wage and hour, which is the trap — because most EPLI policies exclude it outright or cover defense costs only, under a small sublimit.

For most businesses, the likeliest lawsuit is not a fire, a crash, or a slip-and-fall — it is a claim from a current or former employee. Employment practices liability insurance exists for exactly that exposure, but the policy only earns its premium if it is built around how employment claims actually arrive today. The claim mix has shifted: retaliation has overtaken every traditional discrimination category, harassment claims resolve for more than they used to, and wage-and-hour suits — the fastest way for a payroll practice to become a six-figure legal bill — often are not covered at all. This article walks through the three trends, what a standard EPLI form does with each, and where Iowa employers in particular get caught short.

• What are the most common EPLI claims right now?
• Why is retaliation the fastest-growing employment claim?
• Are wage and hour claims covered by EPLI?
• What do harassment claims look like today?
• What do these trends mean for Iowa employers?
• How does Avanti Group approach EPLI?

What are the most common EPLI claims right now?

Employment practices liability insurance (EPLI) covers a business — and usually its owners, officers, and supervisors — against claims by employees, former employees, and applicants alleging wrongful employment acts: discrimination, harassment, retaliation, wrongful termination, and related offenses like failure to promote or negligent supervision. Within that universe, three categories dominate the current claim flow: retaliation leads EEOC charge statistics by a wide margin, discrimination and harassment claims remain the severity drivers, and wage-and-hour disputes have become a constant background hum, especially for hourly-workforce employers. This is the frequency engine of a commercial insurance program: as the private company D&O discussion covered, employment-related suits are the most common management liability claim a privately held business faces, which is why EPLI coverage is usually the first management liability line a growing employer adds. The mistake is buying it on price and assuming the three big categories are treated the same inside the form. They are not.

Why is retaliation the fastest-growing employment claim?

Retaliation is an adverse employment action — termination, demotion, cut hours, a hostile schedule change — taken against an employee because they engaged in a protected activity, such as filing a complaint, participating in an investigation, or requesting an accommodation. It has been the most frequently cited basis in EEOC charges every year since 2009, and in recent years it has appeared in more than half of all charges filed. The reason is structural: a retaliation claim does not require the underlying complaint to succeed. An employee whose discrimination allegation goes nowhere can still win on retaliation if the employer’s response to the complaint looks punitive. Every internal complaint therefore creates a second, independent exposure that begins the moment the complaint is made — and it is the easier claim to prove, because timing alone can carry it. A termination sixty days after a harassment complaint tells a story to a jury regardless of the file’s contents. For employers, the practical consequence is that documentation discipline and manager training around *how complaints are handled* now matter as much as the policies that try to prevent the underlying conduct.

Are wage and hour claims covered by EPLI?

Usually not — and this is the most expensive surprise in the EPLI market. Standard EPLI forms exclude claims arising under the Fair Labor Standards Act and state wage-payment laws — unpaid overtime, off-the-clock work, misclassification of employees as exempt or as independent contractors, tip-credit and break violations — and where carriers offer wage-and-hour coverage at all, it is typically a defense-costs-only sublimit, commonly in the $100,000 to $250,000 range, with no coverage for the back wages themselves. The logic from the carrier’s side is that unpaid wages are a debt, not a fortuitous loss; the consequence from the employer’s side is that the fastest-growing category of employment litigation may be the one their EPLI policy handles worst. Misclassification is the common thread — the same worker treated as a contractor who shows up in a workers comp misclassification dispute is an FLSA collective action waiting to happen, with two or three years of overtime, liquidated damages, and attorney fees on the table. Whether a given EPLI policy has the exclusion, the sublimit, or a rare full grant is a form-reading question, and the discipline is the same one that applies to sublimits, exclusions, and conditions on every commercial policy: the declarations page will not tell you; the form will.

What do harassment claims look like today?

Harassment remains the severity category. Charge volume rose sharply in the years following 2017 and settlements have trended upward since, but the more important shift is in what a harassment claim costs beyond the indemnity dollars: investigation expense, management time, employee turnover, and reputational damage that outlasts the settlement. Two structural points matter for coverage. First, harassment claims routinely name individual owners and supervisors alongside the entity, so who qualifies as an insured person under the form is not fine print. Second, at most private companies EPLI is written as part of a management liability package alongside directors and officers coverage, and package policies often share a single aggregate limit across lines — the same erosion mechanics that play out between the three sides of a D&O policy apply across a combined program, where one bad harassment claim can drain the limit that was supposed to protect the board. A dedicated EPLI limit costs more than a shared one for a reason.

What do these trends mean for Iowa employers?

Iowa employers face all three trends with one added wrinkle: the state threshold is lower than the federal one. Title VII, the main federal employment discrimination statute, applies to employers with fifteen or more employees — but the Iowa Civil Rights Act, Iowa Code chapter 216, reaches employers with as few as four. A twelve-person shop in Johnston or Ankeny that assumes it is too small for employment litigation is wrong by eight employees. Charges filed with the Iowa Civil Rights Commission are cross-filed with the EEOC, so the state and federal tracks run together, and Iowa’s at-will employment doctrine offers less protection than owners tend to assume: at-will means an employer may terminate without cause, not without consequence — retaliation, discrimination, and public-policy exceptions cut straight through it. For the small and family-owned employers that dominate Iowa’s economy, the practical takeaway is that EPLI eligibility begins at a headcount most owners would consider tiny, and the claim categories driving the national numbers are the same ones filed in Polk County.

How does Avanti Group approach EPLI?

At Avanti Group, an EPLI placement starts with a Business Risk Diagnostic™ rather than a quote: headcount and growth plans, states where employees sit, hourly-versus-exempt mix, contractor usage, complaint and termination history, and the handbook and training practices a carrier will ask about anyway — and then reading the proposed forms against the three trends in this article. Does the policy cover retaliation the way claims actually arrive, complaint-first? Is wage and hour excluded, sublimited, or covered — and is the sublimit defense-only? Does the employment practices program share a limit with the rest of the management liability package, or stand on its own? A fast quote answers none of those questions; most agents will hand you one anyway. The right time to find out how your commercial insurance program treats an employment claim is before a former employee’s attorney does.

Frequently Asked Questions

What are the most common EPLI claims?

Retaliation is the most common basis in EEOC charges and has been every year since 2009 — in recent years it has appeared in more than half of all charges filed. Discrimination and harassment claims remain the severity drivers, with harassment carrying the largest settlements and reputational costs. Wage-and-hour disputes (unpaid overtime, misclassification, off-the-clock work) are a major and growing litigation category, but they are frequently excluded from EPLI policies or covered only under a small defense-costs sublimit.

Does EPLI cover wage and hour lawsuits?

Usually not in full. Standard EPLI forms exclude claims under the Fair Labor Standards Act and state wage-payment laws. Where carriers offer wage-and-hour coverage, it is typically a defense-costs-only sublimit — commonly $100,000 to $250,000 — with no coverage for the unpaid wages, liquidated damages, or penalties themselves, because carriers treat back wages as a debt owed rather than an insurable loss. Whether your policy has the exclusion, a sublimit, or broader terms is a policy-form question, not a declarations-page question.

Why are retaliation claims so hard to defend?

Because a retaliation claim stands on its own — the employee does not need to win the underlying complaint. If an employer takes an adverse action (termination, demotion, reduced hours) after an employee engages in protected activity like filing a complaint or requesting an accommodation, the timing itself builds the case. Every internal complaint creates a second, independent exposure, which is why complaint-handling procedures, manager training, and documentation discipline matter as much as the anti-discrimination policies themselves.

Do small Iowa employers really need EPLI?

Sooner than most expect. Federal Title VII applies at fifteen or more employees, but the Iowa Civil Rights Act (Iowa Code chapter 216) reaches employers with as few as four — so Iowa businesses become exposed to state employment discrimination claims at a headcount most owners consider too small to worry about. Iowa’s at-will doctrine does not close the gap: at-will employment permits termination without cause, but retaliation, discrimination, and public-policy exceptions still apply, and charges filed with the Iowa Civil Rights Commission are cross-filed with the EEOC.

Who is insured under an EPLI policy?

Typically the business entity plus its directors, officers, and employees acting in their employment capacity — which matters because harassment and retaliation claims routinely name individual owners and supervisors personally, not just the company. Definitions vary by form: some policies extend to independent contractors leased or temporary workers only by endorsement, and third-party coverage (claims by customers or vendors alleging harassment or discrimination by your employees) is an option worth confirming rather than assuming. The insured-person definition is one of the first things to read in a proposed form.

Related reading

Other articles in the Commercial Foundations series:

• EEOC Charges: The First 30 Days — An EEOC charge is an administrative complaint, not a lawsuit — but it is the mandatory first step toward one, and the first thirty days set the trajectory: preserve every relevant record under a litigation hold, notify the EPLI carrier before spending a dollar on lawyers (the charge itself, not the eventual suit, is the claims-made trigger), work with carrier-appointed panel counsel, and treat the position statement as a document that follows the case for years — with Iowa’s parallel ICRC track reaching employers at just four employees and a 300-day filing window. Fourth article in the Management Liability cluster, second on the EPLI sub-hub.
• EPLI for Restaurants: The Highest-Frequency Sector — Restaurants generate more employment practices claims, more often, than almost any other class of business — a young, hourly, high-turnover, tipped workforce managed by supervisors promoted off the line — and tipped wages are the most dangerous exposure on the menu: tip-credit notice failures, side-work disputes, and manager participation in tip pools scale a single payroll error into a collective action, while standard EPLI forms exclude wage-and-hour claims entirely or cap them at a modest defense-only sublimit; third-party coverage for customer harassment and Iowa’s $4.35 tipped minimum and four-employee ICRA threshold round out what a restaurant placement must answer. Fifth article in the Management Liability cluster, third on the EPLI sub-hub.
• Crime, Employee Dishonesty, and Social Engineering: Three Policies, One Loss — Employee dishonesty coverage pays when your own people steal; social engineering coverage pays when an outsider deceives an authorized employee into sending funds willingly; cyber pays when systems are breached — the same missing dollars can implicate all three, and which policy responds turns on exactly how the money left: the crime form’s separate insuring agreements and the discovery vs loss-sustained trigger, the manifest-intent standard for employee theft, the voluntary-transfer gap that keeps computer fraud coverage from paying deception losses, the routinely sublimited social engineering endorsement with its verification-procedure conditions, and the vendor-email-compromise seam where crime and cyber can both stay quiet. Seventh article in the Management Liability cluster, fourth on the EPLI sub-hub.