EPLI pricing can feel opaque - one restaurant might pay $1,200 a year, another $8,000, and the difference isn't always obvious. At Anchor Insurance, we break down exactly how carriers calculate EPLI premiums so you know what drives your cost and where you can potentially reduce it.
This guide walks through the four biggest factors that affect EPLI pricing for restaurants: headcount, employment practices, prior claims, and training. Understanding these factors helps you budget accurately and choose the right coverage structure.
Factor 1: Employee Headcount (The Biggest Driver of Cost)
The number of employees you have is the single most important factor in EPLI pricing. More employees = more exposure = higher premium.
Why Headcount Matters
- More employees means more potential plaintiffs (each employee is a potential claim)
- More employees means more terminations, discipline decisions, and scheduling conflicts
- Statistical risk increases with headcount - a 50-person restaurant is more likely to face a claim than a 5-person restaurant
How Carriers Count Employees
Carriers typically ask for your total headcount, including full-time, part-time, and seasonal employees. Some carriers also ask for:
- Total annual payroll: Used as a proxy for total labor exposure
- Full-time equivalent (FTE) employees: Adjusts part-time workers to a full-time basis
- Average headcount vs. peak headcount: Some carriers want to know if your headcount fluctuates seasonally
Important: Don't underreport headcount to save on premium. If you have a claim and the carrier discovers you misrepresented your headcount, they may deny coverage or reduce limits proportionally.
Typical EPLI Pricing by Headcount (Rough Benchmarks)
Pricing varies widely by state, industry, and carrier, but here are rough annual premium ranges for restaurants with clean claims history:
- 1-5 employees: $500-$1,500/year for $100,000-$250,000 in coverage
- 6-15 employees: $1,500-$3,500/year for $250,000-$500,000 in coverage
- 16-30 employees: $3,000-$6,000/year for $500,000-$1,000,000 in coverage
- 31-50 employees: $5,000-$10,000/year for $1,000,000 in coverage
- 51-100 employees: $8,000-$20,000+/year for $1,000,000-$2,000,000 in coverage
These are ballpark figures. Your actual premium depends on the other factors discussed below.
Factor 2: Employment Practices and Risk Management
Carriers evaluate how you hire, manage, discipline, and terminate employees. Strong HR practices = lower risk = better pricing (and sometimes better coverage terms).
What Carriers Look For (Favorable Factors)
- Written employee handbook: Covers policies on harassment, discrimination, discipline, and termination
- Anti-harassment and anti-discrimination training: Regular training for managers and employees
- Documented hiring and termination procedures: Written job descriptions, offer letters, performance reviews, termination checklists
- Complaint and investigation procedures: Clear process for employees to report harassment or discrimination, with prompt investigation and documentation
- HR support or access to HR counsel: In-house HR, third-party HR service, or employment attorney on retainer
- Consistent application of policies: Policies are enforced uniformly across all employees (no favoritism or disparate treatment)
What Carriers Penalize (Unfavorable Factors)
- No written policies or employee handbook
- No anti-harassment training for managers
- Informal or inconsistent discipline and termination practices
- High-profile terminations without documentation or progressive discipline
- No process for employees to report complaints
- Managers promoted from within with no HR training
How to Improve Your Risk Profile (and Lower Your Premium)
Even small improvements in your employment practices can reduce your EPLI premium or improve your coverage options:
- 1.Create or update your employee handbook: Include at-will employment disclaimers, anti-harassment policies, complaint procedures, and discipline policies. Many EPLI carriers offer sample handbooks or will provide one as a value-added service.
- 2.Implement annual harassment prevention training: Many states (California, New York, Connecticut, etc.) now require this by law. Even if not required, it's a powerful risk reducer.
- 3.Document everything: Write down performance issues, warnings, complaints, and termination reasons in real time - not after a claim is filed.
- 4.Use termination checklists: Ensure every termination follows a consistent process and is reviewed by someone other than the direct manager.
- 5.Subscribe to an HR hotline or advisory service: Many EPLI policies include access to HR support as a value-added service. Use it.
Factor 3: Prior Claims and Loss History
Your claims history is one of the most important factors in EPLI underwriting. Carriers want to know: Have you been sued before? For what? How was it resolved?
How Carriers Evaluate Prior Claims
- Number of claims: One claim might be explainable; multiple claims signal a pattern
- Type of claim: Harassment and discrimination claims are viewed more seriously than single wrongful termination claims
- Resolution: Was the claim dismissed, settled, or did it go to trial? What were the damages?
- Corrective action: Did you implement policy changes, training, or other improvements after the claim?
- Timing: Claims in the last 3-5 years matter most; older claims have less impact
Impact on Pricing and Coverage
- No prior claims: Best pricing, broadest coverage options, and access to most carriers
- One prior claim (resolved favorably): Slight premium increase (10-25%), some carriers may exclude coverage for similar claims
- Multiple claims or large settlements: Significant premium increase (50%+), some carriers may decline to quote, coverage may be restricted with exclusions or sublimits
- Active or pending claims: Most carriers will not bind coverage until the claim is resolved. If they do, they'll exclude coverage for the pending claim and related matters.
What to Do If You Have Prior Claims
Don't panic. Prior claims don't automatically disqualify you from EPLI coverage, but they do require careful handling:
- Disclose all claims honestly and completely. Hiding claims is grounds for policy rescission.
- Explain the context and any corrective actions you took (new policies, training, terminations of problem employees, etc.)
- Work with an independent broker (like Anchor) who can shop carriers that specialize in higher-risk accounts
- Consider higher deductibles or lower limits to bring premium down if necessary
Factor 4: Manager and Employee Training
EPLI carriers increasingly reward (or require) regular training on harassment prevention, discrimination, and employment law compliance.
Types of Training That Reduce EPLI Risk and Cost
- Anti-harassment training: Teaches employees and managers how to recognize, report, and prevent sexual harassment and other forms of workplace harassment
- Anti-discrimination training: Covers protected classes, unconscious bias, and lawful vs. unlawful employment decisions
- Manager training on discipline and termination: Teaches managers how to document performance issues, conduct lawful terminations, and avoid retaliation claims
- Wage and hour compliance training: Covers proper classification, overtime rules, meal and rest breaks, and tip pooling (especially important for restaurants)
How Training Affects EPLI Pricing
- Some carriers offer premium discounts (5-15%) if you can demonstrate regular, documented training
- Some carriers require annual harassment prevention training as a condition of coverage (especially in California and New York)
- Many EPLI policies include access to online training platforms as a value-added service - use it
Where to Get Training
- Many EPLI carriers provide online training modules as part of your policy
- HR service providers (like ThinkHR, Mineral, Paychex HR) offer training libraries and compliance tools
- Employment attorneys can conduct in-person or virtual training tailored to your restaurant
- State labor agencies often provide free or low-cost training resources (especially for harassment prevention)
Other Factors That Affect EPLI Cost
Beyond the big four, here are additional variables that influence your EPLI premium:
- Location: States with plaintiff-friendly employment laws (California, New York, New Jersey, Illinois) have higher premiums
- Industry: Restaurants, hospitality, and retail face higher claim frequency and therefore higher premiums than low-risk industries like professional services
- Turnover rate: High turnover (50%+ annually) increases termination risk and can raise premiums
- Policy limits: Higher limits = higher premium. We help you balance adequate protection with budget constraints
- Deductible: Higher deductibles lower your premium. Typical deductibles range from $0 to $25,000
- Retroactive date: Policies with full prior acts coverage (no retroactive date) cost more than policies that exclude prior acts
- Third-party coverage: Coverage for claims by customers, vendors, or contractors (not just employees) costs extra
How Anchor Insurance Helps You Get the Best EPLI Pricing
At Anchor, we don't just quote EPLI - we help you understand what's driving your cost and where you can make improvements to reduce it.
- We shop multiple carriers: Different carriers weigh factors differently. We find the carriers that price your risk most favorably.
- We review your employment practices: We help you identify gaps in your HR policies and training that might be increasing your premium
- We explain pricing trade-offs: Higher deductibles, lower limits, or adding exclusions can reduce cost - we explain the trade-offs clearly
- We help you improve your risk profile: We connect you with resources for employee handbooks, training, and HR support that can lower your premium over time
Frequently Asked Questions
What's a typical EPLI premium for a 20-person restaurant?
For a restaurant with 20 employees, clean claims history, and basic employment practices, expect to pay roughly $3,000-$5,000/year for $500,000-$1,000,000 in EPLI coverage. This can vary significantly based on state, turnover rate, wage practices, and carrier. At Anchor, we shop multiple carriers to find the best combination of price and coverage.
Can I lower my EPLI premium by increasing my deductible?
Yes. EPLI policies typically offer deductibles ranging from $0 to $25,000 or more. Increasing your deductible can reduce your premium by 10-30%, depending on the carrier. However, make sure you can afford the deductible if you need to defend a claim - legal fees add up quickly.
Do I get a discount if I bundle EPLI with my BOP or other policies?
Sometimes. Many carriers offer package discounts when you bundle EPLI with your Business Owners Policy (BOP), General Liability, Workers' Comp, or other coverages. Discounts typically range from 5-15%. At Anchor, we compare both standalone and bundled pricing to make sure you're getting the best value.