4 Strategies to Reduce Employment Practices Liability Exposure

As EPL exposure rises, businesses must strengthen risk management

Employment practices liability (EPL) exposures are rising as organizations adapt to new workforce realities. From return-to-office mandates and new laws to the growing use of artificial intelligence (AI) in hiring and performance management, employers are navigating a rapidly changing landscape that is testing even the most experienced HR and legal teams.

In fact, 69% of HR and legal professionals in QBE North America’s 2025 Employment Practices Liability Report said their organization faced an employment-related claim in the past year. And as many as 42% expect that number to increase in the next 12 months.

Shifting regulations, court decisions and heightened employee awareness are redefining workplace liability. Pre-pandemic environments often fail to address the realities of hybrid work, digital oversight and automated decision-making. At the same time, new risks — from AI bias and data privacy to wage-and-hour disputes — are forcing employers to balance change and innovation with compliance.

As defense costs rise and litigation grows more complex, even minor missteps can carry outsized consequences for a business’ finances, morale and reputation. To stay ahead of emerging exposures, employers and brokers can apply these four strategies to strengthen EPL protection and build resilience.

• Treat employment policies as living documents, not static files.

The workplace is evolving faster than employment policies can keep up. New state laws on paid leave and AI transparency along with shifting federal standards have expanded what qualifies as discrimination or retaliation. Leading up to and in the wake of a recent Supreme Court ruling, employees are challenging diversity, equity and inclusion programs with reverse discrimination claims, creating new uncertainty for employers that only a few years ago were under pressure to prove they were doing enough. According to QBE’s research, 69% of HR and legal professional respondents said they are concerned about claims or litigation related to their Diversity Equity Inclusion programs over the next year.

TIPS: Employers will want to review and update HR and employment policies at least annually to reflect current laws, workplace structures and social expectations. That includes ensuring HR initiatives and programs comply with both equal-opportunity and fairness requirements and confirming employee handbooks and procedures align with today’s workforce realities.

• Make documentation a habit, not an afterthought.

When performance reviews go undocumented or disciplinary actions are handled informally, employers lose the ability to demonstrate legitimate business decisions. That lack of evidence can make even a justified termination appear discriminatory or retaliatory.

TIPS: Establish consistent documentation practices across all levels of management to help close these gaps. Record every performance conversation, corrective action and accommodation request objectively, and store documentation securely. Doing so creates a clear, defensible record that supports both employee fairness and organizational protection.

• Audit where and how AI is used in HR.

AI tools are transforming how employers recruit and evaluate employee performances, but they’re also introducing new exposures. As many as 84% of organizations now use AI in HR functions, and 72% are concerned about the risk. Because algorithms are often trained on historical data, they can unintentionally replicate patterns of discrimination, creating potential violations under Title VII and new state-level AI laws.

TIPS: Employers should review how AI is being used in hiring and performance decisions, ensure human oversight remains and verify vendors can explain how their tools make recommendations. Reviewing HR technology policies with existing EPL coverage can help ensure protection keeps pace with innovation.

• Pair employee training with accountability.

Training is one of the simplest and most effective tools for reducing EPL risk, but only if it’s reinforced. QBE’s report identified the use of AI in HR (54%), employee data privacy (47%), and workplace harassment and discrimination (47%) as areas where employees need stronger education. Back up training with follow-through to retain its impact.

TIPS: Employers should document completion, hold managers accountable for consistent application and refresh content regularly to reflect new regulations and workplace realities. Embedding compliance and ethics training into everyday leadership practices turns education into prevention.

Evolving EPL coverage to match evolving risk

EPL protection should not begin and end at renewal. As workplace risks evolve, so should coverage. Treating EPL insurance as part of a broader workforce risk management strategy ensures that policies, training and technology oversight all work together to reduce exposure. By staying engaged with brokers and carriers year-round — not just during a crisis — employers can identify new vulnerabilities early, adapt coverage to match changing regulations and strengthen resilience in an increasingly complex employment landscape.

QBE North America is a global insurance leader focused on helping businesses manage and transfer risk. Through specialized Employment Practices Liability coverage and expert claims guidance, QBE supports employers in navigating complex workplace challenges and building long-term resilience. To learn more, visit qbe.com/us and read the full 2025 Employment Practices Liability Report.

QBE makes no warranty, representation, or guarantee regarding the information herein or the suitability of these suggestions or information for any particular purpose. QBE hereby disclaims any and all liability concerning the information contained herein and the suggestions herein made. Moreover, it cannot be assumed that every acceptable risk transfer procedure is contained herein or that unusual or abnormal circumstances may not warrant or require further or additional risk transfer policies and/or procedures. The use of any of the information or suggestions described herein does not amend, modify, or supplement any insurance policy. Consult the actual policy or your agent for details about your coverage. QBE and the links logo are registered service marks of QBE Insurance Group Limited. © 2025 QBE Holdings, Inc.