Today, two things are true about Employment Practices Liability Insurance (EPLI) and workplace harassment.

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1.  The exposure is larger than it has ever been: nuclear verdicts, third-party litigation funding, and juror attitudes toward corporate conduct have escalated damages costs.

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• Verdicts have changed scale. A nuclear verdict is a jury award of $10 million or more, and they are no longer rare. Swiss Re's Social Inflation Index puts U.S. claims-severity growth beyond economic inflation at 5.4% a year from 2017 to 2022, driven by litigation funding, verdict size, and juror expectations of corporate conduct, and calls the current pace unsustainable. None of it stops at the EPL boundary.

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• Quiet settlement is no longer available. Federal and state limits on non-disclosure and non-disparagement agreements mean more harassment matters become public, and more are litigated rather than resolved. The cost of a substantiated claim now includes the story that follows it.

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2.  The coverage responds the only way a liability policy can. When an employee reports harassment and asks that it stop, the person is defined as an adverse third party, a claimant to be defended against. Nothing in the policy's design changes when an investigation substantiates the report.​

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• A report to HR is a demand for non-monetary relief, which triggers the coverage. The employee who reported, even one whose report is substantiated, is handled as an adversary.

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• The company's own losses due to a harasser (attrition, disruption, reputation) are never in the policy's view. They accrue on the employer's side while the coverage is occupied with defense. 

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• When the workforce witnesses a reporting colleague incurring adversarial treatment, they learn not to report. Roughly 90% of people who experience harassment never file a charge, and three in four never tell a supervisor.

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The endorsement changes coverage in the case of a substantiated harassment report and changes the trajectory away from a nuclear verdict. For a carrier, it is a differentiated response to one of the most expensive exposures in the line. For a policyholder, it provides a valuable product improvement. It amounts to margin restoration on an existing book of business.