Does my tree service need employment practices liability insurance?

Employment practices liability insurance (EPLI) is one of the most overlooked coverages in the tree service industry, yet employment-related lawsuits are among the fastest-growing categories of commercial litigation. Any tree service with employees — whether two or two hundred — faces exposure to claims alleging wrongful employment practices.

EPLI covers a broad range of employment-related claims including wrongful termination (firing an employee for an illegal reason or in violation of an employment contract), discrimination based on race, gender, age, religion, national origin, disability, or other protected classes, sexual harassment (both quid pro quo and hostile work environment), retaliation against employees who file complaints or participate in investigations, failure to promote, wrongful discipline, wage-and-hour violations (in some policies), and negligent hiring, supervision, or retention.

The tree service industry has specific characteristics that elevate EPLI exposure. The workforce is predominantly male and physically demanding, which can create environments where harassment and discrimination claims arise. Crew dynamics involve close working conditions, long hours, and high stress during storm season. Hiring decisions are often informal, terminations may be handled without documentation, and wage practices — particularly regarding overtime for non-exempt field workers — may not fully comply with the Fair Labor Standards Act (FLSA). Each of these factors increases the probability of an employment practices claim.

Defense costs are the primary financial risk, even more than judgments. The average cost to defend an employment practices claim through trial is $125,000 to $250,000. If the case goes to a jury and you lose, damages can reach six or seven figures. Even frivolous claims that are dismissed early cost $25,000 to $50,000 to defend. Without EPLI, these costs come directly from your business operating funds — your general liability policy specifically excludes employment-related claims.

EPLI premiums for small tree service companies (5 to 25 employees) typically range from $2,000 to $7,000 annually for $1 million in coverage. The policy is usually written on a claims-made basis with a retroactive date. Deductibles or self-insured retentions of $2,500 to $10,000 are standard. Some Business Owner's Policies (BOPs) include a small EPLI sublimit ($25,000 to $100,000), but this is rarely adequate for a serious claim.

To reduce both your EPLI exposure and your premiums, implement documented employment practices: maintain an employee handbook with anti-harassment and anti-discrimination policies, use consistent hiring and termination procedures, document performance issues and disciplinary actions, ensure proper worker classification (employee vs. independent contractor), comply with FLSA overtime requirements, and train supervisors on lawful employment practices. Carriers evaluate these factors when underwriting EPLI and offer better terms to companies with strong HR practices.