The soft EPL market is expected to continue into 2025, with abundant capacity driven by new entrants—particularly MGAs and Insurtech platforms—mirroring trends seen in the private D+O space. Most clean risks are renewing flat or with modest rate decreases, and underwriters remain aggressive in pursuit of new business.

However, beneath the surface, the line is facing growing social and political headwinds. A cultural shift toward increased accountability in the workplace is clashing with a wave of corporate pullbacks from ESG and DEI initiatives. Companies are quietly eliminating roles, scaling back programs, and reshaping their messaging, which is creating a breeding ground for employee dissatisfaction. This environment is expected to lead to a rise in discrimination, retaliation, and wrongful termination claims in 2025 and beyond.

While rates remain competitive on clean risks, underwriters are beginning to increase retentions across the board, particularly through the use of separate class action or jurisdiction-specific retentions for California, New York, and higher-wage earners. These trends are likely to persist throughout 2025, as insurers try to balance pricing stability with increased claims volatility. Underwriters are especially cautious around industries like healthcare, staffing, hospitality, retail, auto dealers, law firms, and certain tech sectors.

Supplemental coverages such as wage and hour defense, FLSA, and IRCA defense cost sublimits remain available in most states but continue to be tightly restricted or sublimated in California. A limited number of carriers have begun offering defense-only sublimits for BIPA (Biometric Information Privacy Act) exposure, though these are typically not automatic and may require targeted underwriting or supplemental applications.

While California EPL rates have cooled somewhat—with many clean accounts renewing flat—it remains a difficult jurisdiction for underwriters due to its litigation climate, evolving employment laws, and aggressive plaintiffs’ bar. As a result, many national carriers continue to apply stricter underwriting and higher retentions on California-headquartered or high-employee-count businesses operating in the state.

Overall, EPL coverage remains widely available, and most carriers are not pulling back on capacity. However, underwriters are laser-focused on emerging issues including pay equity, employee privacy, ESG-related disclosures, and sexual harassment claims—particularly in light of social inflation and the potential for large settlements or class actions. More insurers are deploying supplemental questionnaires and industry-specific scrutiny, particularly in sectors with volatile workforce dynamics or unionizing activity.