Termination Insurance

Last Updated: September 23, 2017

Definition - What does Termination Insurance mean?

In liability insurance, termination insurance is a type of business liability coverage wherein an employer is protected in case an employee sues the company for wrongful termination. Wrongful termination insurance used to be covered under regular business liability but later on, it was issued under employment practices liability (EPL) coverage.

Insuranceopedia explains Termination Insurance

Wrongful termination is one of the risks covered under the all-encompassing employment practices liability coverage, which protects employers from the financial implications of employment-connected court cases. This insurance coverage covers lawsuits against race or age discrimination, wrongful termination, sexual harassment or even legal suits arising from disputes between employees and third parties. Employers who want to protect themselves from the financial woes of lawsuits filed by terminated employees should take out an EPL policy.

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