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Survey Report

Insurance Marketplace Realities 2023 Spring Update – Employment practices liability

April 28, 2023

The EPL market continues to stabilize largely due to competition with markets eager to write new business and maintain their renewals.
Workers Compensation|Employee Experience
Rate predictions: Employment practices liability
Trend Range
Domestic and Bermuda markets Neutral increase (yellow line, purple triangle pointing up) Flat to +10%

Competition is still strong and keeping the EPL market stable.

  • The extent of rate increases will be determined by many factors, particularly industry, loss history and location of employees. Assuming no change in risk profile and no losses, rate increases are more likely to be close to or at flat. California continues to be the most problematic jurisdiction. New Jersey, New York and Florida continue to be challenging as well.
  • Retentions: While most retentions have been “corrected,” loss history and location of employees may still lead to increases in retentions. Markets continue to seek separate retentions for class actions, especially in California, as well as separate retentions for California single-plaintiff claims and for highly compensated employees in certain industries. Some domestic markets are also adding separate retentions for NY, NJ and IL.
  • Limits: Many domestic markets continue to provide lower limits — $5 million to $10 million with some Bermuda markets also looking to cut back to $15 million.
  • Excess: As in other lines, excess EPL markets are following primary increases in addition to looking to correct increased limit factors (ILFs).
  • Capacity: Overall capacity in the EPL market is stable. Additional capacity (AIG) has been added in the Bermuda market.
  • Underwriting: Expect some questions regarding ESG (specifically, diversity, equity and inclusion initiatives), pay equity audits, labor shortages, whether layoffs are being considered and supply chain challenges (depending on the industry).
  • Coverage: Coverage remains intact; carriers continue to add privacy/biometrics exclusions.

Artificial intelligence in the workplace may lead to employment practice violations.

  • Many companies are using software, including artificial intelligence, and other technologies in hiring and in other employment decisions. The use of these technologies may be helpful for employers in saving time, etc. but they may also discriminate.
  • In May 2022 the EEOC issued guidance for employers to help ensure that the use of artificial intelligence does not violate the Americans with Disabilities Act.
  • A New York City law, effective April 15, 2023, will require employers to have an independent bias audit conducted on their automated employment decision tools. Otherwise, they will face penalties.
  • Other states, such as, D.C., Massachusetts, Illinois, New Jersey, also have proposed legislation.

ESG, pay equity legislation and changes in the economy could impact employment claims.

  • In the employment context, focus on the “S” in ESG will continue into 2023. Specifically, the focus will be on diversity, equity and inclusion initiatives within organizations. Employees are using social media to push their organizations to implement ESG policies, particularly around pay equity, gender and racial equality and sexual harassment. Insureds should continue to expect questions from underwriters regarding their diversity, equity and inclusion initiatives, particularly racial equity and pay equity.
  • In relation to pay equity, there has been a push to require employers to offer pay transparency for applicants and employees. Many states, including California, Rhode Island, Maryland, Washington, Connecticut and Colorado, are implementing laws wherein employers must disclose the pay range for applicants. Insureds should expect questions from underwriters regarding status of pay equity audits and compliance with transparency laws.
  • Rising costs and potential recession are leading many employers to consider layoffs, which can potentially lead to an increase in employment claims. The tech industry has been experiencing some major layoffs over the past few months, and 61% of companies have indicated they will likely have layoffs in 2023. Additionally, please see WTW’s article on tech industry layoffs and employment practices liability implications here.


Willis Towers Watson hopes you found the general information provided in this publication informative and helpful. The information contained herein is not intended to constitute legal or other professional advice and should not be relied upon in lieu of consultation with your own legal advisors. In the event you would like more information regarding your insurance coverage, please do not hesitate to reach out to us. In North America, Willis Towers Watson offers insurance products through licensed entities, including Willis Towers Watson Northeast, Inc. (in the United States) and Willis Canada Inc. (in Canada).


National Employment Practices Liability Product Leader, FINEX North America

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