Common EPLI Claims in Restaurants and Hospitality (With Real Examples)
Employment Practices Liability Insurance (EPLI) protects restaurants, cafés, bars, hotels, and other hospitality businesses from costly employee-related claims. In a fast-paced environment with high turnover, long shifts, and constant schedule changes, even a small HR issue can turn into a legal demand. Below are real-world style examples of how these claims happen and how EPLI can respond.
1. Wrongful Termination After a Scheduling Dispute
A restaurant manager terminated a server for repeatedly switching shifts without approval. The server claimed it was retaliation. She said she had complained two weeks earlier about not being paid for overtime. She filed a complaint and brought in the EEOC. The claim settled for about $45,000 plus roughly $18,000 in legal fees. EPLI covered the defense costs and the settlement amount, which kept the restaurant from paying that out of pocket.
2. Harassment and Hostile Work Environment at a Hotel Front Desk
Multiple front desk employees at a boutique hotel reported that a supervisor was making inappropriate comments and jokes during overnight shifts. They also said management ignored it after they complained. The group brought a hostile work environment claim. Legal defense alone went over $75,000 and the carrier ultimately negotiated a confidential settlement. EPLI responded to both the cost of the attorneys and the settlement resolution.
3. Tip Pooling and Wage Violation Allegations
A group of servers alleged the restaurant’s tip pool was illegal because shift supervisors were included in the pool. That allegation turned into a class-style wage and hour claim that also accused the restaurant of missed breaks and off-the-clock closing work. The dispute cost more than $120,000 between settlement payments and attorney fees. EPLI helped with defense for the “wrongful employment act” portion of the claim so ownership had legal counsel from day one.
4. Failure to Rehire After Medical Leave
A hotel employee went on medical leave for a documented condition. When she was cleared to return, management told her the schedule had changed and her role had been filled. She alleged disability discrimination and failure to accommodate. The case went to EEOC mediation and resulted in a $35,000 settlement plus mandatory manager training. EPLI covered the legal costs associated with responding, negotiating, and resolving the claim.
Why Restaurants and Hospitality Are High Risk
Restaurants and hospitality are some of the most frequently targeted industries for employment-related claims. Common reasons:
- High turnover and frequent terminations
- Young or inexperienced staff, including minors and part-time workers
- Overtime, split shifts, and tip handling
- Multiple managers or shift leads, so messaging is not always consistent
- Informal culture where comments or jokes can cross a line
From an insurance standpoint, here are the types of allegations EPLI is designed to address:
- Discrimination (age, gender, race, disability, pregnancy, etc.)
- Wrongful termination or constructive discharge
- Sexual harassment or hostile work environment
- Retaliation after an employee reports an issue
- Failure to promote, negligent evaluation, or unfair discipline
- Wage and hour disputes (often limited coverage or defense-only, depending on carrier and form)
Without EPLI, a single claim can easily cost more than a full year of profit for an independent restaurant or small hotel. Defense costs alone can reach five figures before you even talk settlement.
How to Get EPLI Coverage
EPLI can often be added to your existing Business Owner’s Policy, or written as its own standalone policy with broader terms. WHINS Insurance Agency places EPLI for restaurants, cafés, franchise operators, hotel groups, and hospitality groups in California and beyond.
Next step: Get a no obligation quote using our secure form here: www.whins.com/getepli.
We will review your headcount, turnover pattern, prior claims, and tipped vs non-tipped payroll so we can approach carriers that understand restaurant and hospitality staffing. After that, we’ll show you options and pricing in plain language.
Important
Coverage, claim-trigger language, wage and hour sublimits, and defense cost treatment vary by carrier. You should always review the actual policy and endorsements for full details before binding. This article is for general educational purposes only and does not amend, extend, or replace any policy wording.