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Survey Report

Insurance Marketplace Realities 2024 Spring Update – Employment practices liability

May 8, 2024

Competition keeps the EPL market stable, but with a rise in claims and employee-friendly regulations, significant loss history can elicit rate increases on the higher end.
Employee Experience|Financial, Executive and Professional Risks (FINEX)
Rate predictions: Employment practices liability (EPL)
  Trend Range
Domestic markets Neutral increase (Arrows pointing top) Flat to +10%
Bermuda markets Neutral increase (Arrows pointing top) Flat to +5%

Competition is still strong and keeping the EPL market stable

  • Rates: 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 for insurers. New Jersey, New York and Florida remain challenging as well.
  • Retentions: While many retentions have been stabilized, 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. Moreover, some domestic markets have also sought separate retentions for states (e.g., California, Illinois, New York and New Jersey) and sometimes even county-specific retentions. In many instances, there are separate (higher) retentions for highly compensated employees in certain industries.
  • Limits: Both Bermuda and domestic markets are managing their capacity on any given risk. Domestically, markets are providing between $5 million and $10 million. In Bermuda, markets are cutting back to $15 million ($10 million in some instances).
  • Excess: EPL markets are generally following primary increases in addition to looking to adjust increased limit factors (ILFs) for certain risks.
  • Capacity: Overall capacity in the EPL market is stable. Additional capacity (Relm) has recently been added in the Bermuda market.
  • Underwriting: Expect some questions regarding ESG (specifically, diversity, equity and inclusion initiatives), pay equity audits, adherence to new pay transparency laws and labor shortages. Many markets have separate questionnaires for biometrics, sexual harassment and pay equity.
  • Coverage: Coverage remains intact; markets continue to add privacy/biometrics exclusions, and in some cases, broaden existing exclusions. Small sublimits for defense cost coverage are available from certain insurers upon satisfactory completion of the previously mentioned biometric questionnaires.
  • Industry-related factors of note:
    • Healthcare/technology, media and telecommunications: In these sectors continue to see separate retentions for high wage earners.
    • Retail and distribution: Layoffs (with more seen at the corporate level) have impacted pricing for this sector.

The Department of Labor and National Labor Relations Board issue final rules on joint -employer standard and independent contractor classification

  • The NLRB’s new Final Rule for determining joint-employer status under the National Labor Relations Act expands the current standard by reviewing whether an entity has authority to control at least one of the seven essential terms and conditions of employment, notwithstanding whether the entity applied that control.
    • The NLRB published a list of seven categories of terms and conditions that it will consider “essential” for purposes of the joint-employer inquiry.
    • Under this new test more organizations may be found to be a “joint employer,” thereby, potentially expanding exposure. Some markets have added joint-employer questionnaires to their underwriting process.
  • The U.S. Department of Labor published its final rule on employee or independent contractor classification under the Fair Labor Standards Act on Jan. 10, 2024. The final rule went into effect on March 11, 2024.
    • It implements a six-factor test for worker classification that is in line with judicial precedent. In effect, the final rule returns to a totality-of-the-circumstances analysis of “economic realities” when determining worker status.
    • This new rule will make it more challenging to classify individuals as independent contractors.

Reverse discrimination claims on the rise

  • The Harvard and UNC Supreme Court decisions have cast a watchful eye on diversity, equity and inclusion (DEI) initiatives within organizations leading to a rise in reverse discrimination claims.
  • Last summer’s decision was specifically limited to affirmative action in admissions processes in higher education and the legality of same under Title VI and the Fourteenth Amendment.
  • While affirmative action in the employment context is different and strictly prohibited pursuant to Title VII of the Civil Rights Act (the governing law for employment matters), the decision has led to more scrutiny of corporate DEI programs and their hiring processes.

The EEOC’s new Strategic Enforcement Plan for 2024-2028 includes a focus on artificial intelligence in the employment context

  • Last Fall, the EEOC released its updated Strategic Enforcement Plan (SEP) for the next four years and listed six key priorities.
  • The EEOC continues to focus on systemic harassment, equal pay and protecting vulnerable workers. The updated plan also focuses on employer use of artificial intelligence (AI) for hiring and other employment decisions.
    • The EEOC previously issued guidance on the use of AI in the employment context.
    • The EEOC guidance is “limited to the assessment of whether an employer’s ‘selection procedures’ — the procedures it uses to make employment decisions such as hiring, promotion and firing — have a disproportionately large negative effect on a basis that is prohibited by Title VII.” Essentially, it is focused on disparate impact claims.


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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