Products-Completed Operations
Also known as: Products + Comp Ops, PCO
Critical for contractors, manufacturers, food service, and retail. Without this endorsement, a customer injured by a product months after purchase or by faulty work years after completion may not be covered. Most GL policies include this automatically — verify on the declarations page.
Real-world scenario
Brightline Marketing Group, a 42-employee advertising agency in Austin, buys an Employment Practices Liability Insurance policy after its HR manager flags rising turnover. The agency selects a $1,000,000 per-claim limit with a $1,000,000 annual aggregate, a $25,000 self-insured retention, and adds a wage-and-hour defense sublimit of $50,000. Its annual premium comes to $4,800, roughly $114 per employee, billed as $400 a month.
Fourteen months in, a terminated senior designer files a discrimination and wrongful-termination suit, alleging a wrongful act tied to her firing and demanding $300,000 in lost wages and emotional-distress damages. Brightline reports the claim, pays its self-insured retention of $25,000, and the insurer assigns defense counsel billing $375 an hour. Over eleven months, defense costs reach $85,000, an economic-damages expert adds $12,000, and mediation runs $6,500.
At mediation the parties settle for $140,000. All told, the matter costs $243,500: the carrier funds $218,500 above the retention, and Brightline's out-of-pocket stays capped at its $25,000 retention. Had the claim also named the agency for a client complaint, its third-party EPLI extension would have responded; without any policy, a single six-figure defense bill could have wiped out a full quarter's profit.
How it affects your premium
EPLI pricing turns less on revenue than on how many people you employ and where they work. Underwriters model the probability of an employee lawsuit, so headcount, geography, and HR maturity move the premium most:
- Total employee count and payroll — more W-2 employees means more potential plaintiffs, so premium scales with headcount far more than with sales revenue.
- State and venue — operations in plaintiff-friendly states like California, New York, or Illinois carry higher rates because of aggressive wage-and-hour and discrimination statutes.
- Industry turnover profile — high-churn sectors (restaurants, retail, staffing) see more terminations and thus more claims than stable professional offices.
- Retention and limit selected — a higher self-insured retention lowers premium, while richer limits and a wage-and-hour defense sublimit raise it.
- HR practices and documentation — written handbooks, anti-harassment training, and consistent discipline records earn credits; their absence draws surcharges or declinations.
- Prior claim history — past EEOC charges or lawsuits signal repeat exposure and drive rates up sharply.
- Recent layoffs or reductions in force — mass separations spike claim frequency and can trigger short-term rate loads or coverage restrictions.
Common misconceptions
Myth: My general liability policy already covers employee lawsuits.
Reality:
It does not. A standard general liability policy excludes employment-related claims like harassment, discrimination, and wrongful termination — those need a dedicated EPLI policy.
Myth: EPLI is the same thing as Directors and Officers or workers' comp coverage.
Reality:
They cover different risks: D&O insurance protects leaders for management decisions, employers liability handles workplace injury lawsuits, and EPLI specifically answers claims of harassment, discrimination, and wrongful termination.
Myth: Only big companies get sued by employees, so a small business doesn't need EPLI.
Reality:
Small firms are frequent targets and often lack in-house counsel to absorb a defense; even a meritless claim can generate tens of thousands in legal fees that EPLI is built to pay.
Frequently asked questions
Does EPLI cover the cost of defending a claim even if we did nothing wrong?
Yes. EPLI typically funds defense costs — attorney fees, expert witnesses, and court costs — even for groundless or fraudulent allegations, subject to your retention and whether defense erodes your limit under a defense inside or outside limits provision.
Are wage-and-hour lawsuits covered under EPLI?
Usually only defense costs are covered, and only if you buy a specific wage-and-hour defense sublimit; the actual back-pay and penalties owed are commonly excluded.
EPLI is almost always written on a claims-made basis — what does that mean for me?
A claims-made policy responds only to claims first made while coverage is active, so you must keep the policy in force and watch your retroactive date to preserve coverage for past employment acts.
Can customers or vendors trigger our EPLI, not just employees?
Only if you add a third-party EPLI extension, which covers harassment or discrimination claims brought by clients, customers, or vendors rather than staff.
How much does EPLI usually cost a small business?
Premium is driven mainly by employee headcount, state, and turnover; a small office often pays a few thousand dollars a year, and choosing a higher deductible or retention can meaningfully lower it.
Sources cited
Need products-completed operations coverage?
Compare quotes from 10+ commercial insurance carriers in 5 minutes. Free, no contact info required.
Get My Quotes →