Employment Practices Liability Insurance
As a national church insurance agency, Integrity Now Insurance Brokers has helped hundreds of churches and religious organizations across the country navigate Employment Practices Liability Insurance (EPLI). We understand the unique employment risks churches face — from volunteer coordinators to ordained staff — and we place EPLI coverage with carriers that specialize in religious organizations.
Churches and nonprofits can be a rewarding place to work, but the combination of hierarchical leadership, volunteer-heavy environments, and faith-based culture can create employment liability exposures that standard business policies often overlook.
Because of this, churches face a growing likelihood that an employee, former employee, or applicant will pursue a lawsuit alleging discrimination, sexual harassment, wrongful termination, or retaliation.
Separating church culture from employer responsibilities is one of the hardest challenges ministry leaders face — and one of the most expensive when it goes wrong.
To help you protect against this liability from an insurance point of view, church insurance companies offer Employment Practices Liability Insurance (“EPLI”) coverage.
This insurance helps provide the needed coverage related to wrongful employment act claims, against your church organization. A typical employee or applicant can make the accusation that you as their employer violated their legal rights.
This includes employment-related claims made through the Equal Employment Opportunity Commission (EEOC) or the equivalent state administrative agency.
As church insurance experts, we have heard from countless churches, that their employees would never pursue legal action. Unfortunately, I wish this was true, but we have seen time and time again churches face legal challenges even from their most trusted church members.
What Employment Practice Liability Insurance Covers For Churches
Unlike a workers’ compensation insurance policy that protects your employees if they become injured on the job. An Employment Practice Liability Insurance policy provides coverage for both the employer and the employee for reimbursement for settlements, judgments, and the expense of defending yourself when you are accused of:
- Failure to hire or promote within
- Discrimination against employees or prospective employees
- Sexual or other harassment or coercion
- Wrongful termination, dismissal, or discharge
- Employer retaliation
- Employment-related libel, slander, humiliation, mental anguish infliction of emotional distress, defamation, or invasion of privacy.
- Employment-related misrepresentations to employee or applicant
- Other wrongful employment acts
The Ministerial Exception: What Churches Need to Know
One of the most misunderstood aspects of EPLI for churches is the ministerial exception — a legal doctrine that can exempt churches from certain employment discrimination claims brought by ministers and clergy. While this doctrine can protect a church in some disputes, it does not eliminate EPLI risk. Here is what church leaders need to understand:
- It applies only to ministerial employees. Claims from administrative staff, maintenance workers, childcare workers, or other non-ministerial employees are fully subject to employment discrimination law — and fully covered by an EPLI policy.
- Courts interpret it narrowly. A title or ordination certificate alone does not make someone a minister. Courts examine whether the employee’s primary duties reflect religious teaching and leadership. Many churches have lost ministerial exception arguments for roles that sounded ministerial but functioned administratively.
- Defense costs remain. Even when a church ultimately wins a ministerial exception argument, it must still pay legal fees to get there — often $50,000 or more. EPLI covers those defense costs.
- The exception does not cover harassment. Some courts have declined to apply the ministerial exception to sexual harassment and hostile work environment claims, meaning those claims proceed to trial.
Bottom line: the ministerial exception is a legal defense, not an insurance substitute. Churches that rely on it instead of EPLI are taking on significant financial risk.
Common EPLI Exclusions Churches Should Know
Not every employment-related claim is covered by an EPLI policy. Churches should review their policy carefully and work with a church insurance specialist to understand what is and is not included. Common EPLI exclusions include:
- Workers’ compensation claims. Physical injuries on the job are covered by workers’ comp, not EPLI. The two policies work side by side.
- Criminal acts and intentional fraud. Coverage does not apply if a court finds the act was willful, criminal, or fraudulent.
- Prior known claims. If a claim was reported or known before the policy inception date, it is typically excluded.
- ERISA and benefit plan claims. Claims arising from employee benefit plan decisions are excluded from standard EPLI and require separate coverage.
- Bodily injury and property damage. Physical harm during an employment dispute is excluded from EPLI and falls under general liability.
- Wage and hour violations. Many standard EPLI policies exclude wage and hour claims (such as unpaid overtime or misclassification). Some carriers offer an endorsement to add limited wage and hour coverage — ask your broker.
- Third-party claims without endorsement. A standard policy covers claims by employees. Claims by vendors, volunteers, or members of the public as a result of employment-related conduct may require a third-party liability endorsement.
Integrity Now Insurance Brokers reviews policy exclusions with every church client to ensure there are no surprises when a claim is filed.
How Much Employment Practice Liability Insurance Coverage Should Our Church Carry
The average Employment Practice Liability Insurance claim costs an organization between $27,000 and $50,000. We have seen very few claims fall below the $27,000 mark but we have seen many claims exceed $150,000.
The cost difference between $100,000 in Employment Practice Liability Insurance coverage and $250,000 is a couple hundred dollars a year. Your church does have the option of obtaining up to $1,000,000 in Employment Practice Liability Insurance coverage which cost around $1,000 or less for most churches.
Following are a few claims that illustrate how a claim can happen, — and their possible costs:
A small nonprofit organization board members disagree with how the Director was managing the nonprofit. They get into an argument which then leads to their termination. The employee feels like the board members had wrongfully terminated the Employee. The claimant provided several emails and was able to get a fellow employee who attested to the claimed adverse treatment by the nonprofit. Settlement: $170,000
The church office manager felt excluded from staff meetings as a woman. The weekly church staff meetings only included male staff. When she was invited to a meeting, there was usually a separate staff meeting that took place after she was excused. Employee felt discriminated against because she was a woman and filed a lawsuit after she had told church leadership of her concerns with no change in behavior. Settlement: $85,000
If your church faced a $500,000 Employment Practice Liability Insurance claim, would your church organization be able to survive? We understand that most churches are barely able to afford the bills they are faced with each month. Having a well-balanced church insurance program is vital to your church’s overall success.
Ways For Churches to Reduce Their Risks
Churches face huge challenges as they attempt to function as a church ministry, but they cannot forget they are also considered an employer and face employment liability risk. Unfortunately, churches are also a business and need to have the protective safeguards in place to protect the organization and the employees’ rights.
Churches who are too small to afford a Human Resource professional, has no documented best practices to follow, and potentially high employee turnover rates due to low pay, are all contributing factors your churches can’t afford not to have an Employment Practice Liability Insurance policy in place.
When your church seeks to help prevent wrongful employment act claims, you may want to consider the following:
- Stay up to date on current employment laws
- Keep your church insurance agent updated on changes to your church staff.
- Obtain and update your hire processes.
- Have a detailed employee handbook updated annually to stay in compliance with your state laws.
- Make it clear that you have a zero-tolerance policy on sexual and other types of harassment.
- Review your church organization for possible discrimination exposures.
- Request anonymous reviews from all staff members of all ages, race, and genders if they feel change needs to happen related to discrimination.
- Conduct background and reference checks prior to employment.
- Conduct annual documented reviews of your staff.
Frequently Asked Questions About Church EPLI Insurance
Do small churches need Employment Practices Liability Insurance?
Yes. The size of a congregation does not reduce EPLI exposure. Small churches are actually more vulnerable because they typically lack HR staff, written employment policies, and consistent documentation — all of which are key defenses in an employment claim. A single claim can cost $50,000 to $300,000 or more in defense and settlement costs, which can be financially devastating for a small church.
Does EPLI cover volunteer-related employment claims?
Standard EPLI policies cover claims made by employees, former employees, and applicants. Coverage for volunteers depends on the policy language. Some carriers extend coverage to volunteers through an endorsement. If your church relies heavily on volunteers in leadership or supervisory roles, ask your broker about volunteer coverage specifically.
What is the difference between EPLI and workers’ compensation?
Workers’ compensation covers physical injuries employees sustain on the job. EPLI covers claims alleging violations of employment rights — such as discrimination, harassment, or wrongful termination. The two coverages are complementary and address completely different types of risk. Churches need both.
Can a church be sued for discrimination if it hires based on religious beliefs?
Yes and no. Title VII of the Civil Rights Act provides a religious organization exemption that allows churches to make employment decisions based on religion for positions that serve a religious purpose. However, this exemption does not cover race, sex, age, or disability discrimination for most roles. Churches should never assume broad immunity from discrimination claims, and EPLI provides the defense coverage needed when those claims are filed.
How much does Church EPLI Insurance cost?
Church EPLI premiums vary based on the number of employees, claims history, whether the church has written HR policies, and the limits and retention selected. Most small to mid-size churches pay between $800 and $3,000 per year for standalone EPLI coverage. When bundled into a commercial package policy alongside general liability and property coverage, the total premium often comes in lower than purchasing each policy separately.
We Can Help You Buy an Employment Practice Liability Insurance Policy for Your Church
Our church insurance agents are ready and waiting, to help your church obtain an employment practice liability insurance policy your church. We strive to make the insurance process as quick and smooth as possible.
In order to save your church money on their insurance our church insurance providers include EPLI coverage as part of a commercial package policy. This includes coverage for your general liability insurance, directors and officers insurance, abuse and molestation insurance, church property insurance, and more. We will also help your church secure a workers’ compensation insurance policy and a church business auto insurance policy.
To get started, feel free to give one of our church insurance brokers a call and/or fill out the contact form with any questions or queries you might have. Our church insurance experts will assist you throughout the entire process, providing unique insurance and risk management solutions for your Church.
Don’t wait any longer; take the first step toward having adequate church property insurance protection today at an affordable price! We’re just a phone call away. So feel free to reach out to us at any time for any queries or questions regarding our services.