By Jessica MartinezContributing Writer, Business & Finance, Encore Editorial
The short answer
In this model, a 10-employee company lands somewhere between $9,000 and $17,000 a year for standard $1M/$1M EPLI coverage, more in California or New York, less in states with a lighter employment law environment.
Figures this estimator uses
The per-employee base rate is built from revenue per employee, then floored and capped so neither very small nor very large firms produce an unrealistic number. These are the 2026 figures coded into the calculator.
| Input | Rate or factor |
|---|---|
| Per-employee base rate | $0.80 per $1,000 of revenue per employee |
| Per-employee floor | $800 |
| Per-employee cap | $3,000 |
| $250K/$250K limit factor | 1.0 |
| $500K/$500K limit factor | 1.25 |
| $1M/$1M limit factor | 1.55 |
| $2M/$2M limit factor | 1.90 |
| State factor range | 0.80 (Wyoming) to 1.40 (California, New York) |
How the premium is calculated
Divide revenue by employee count to get revenue per employee, then apply the per-employee base rate, floor, and cap above to land on a per-employee number. Multiply that by employee count, your coverage-limit factor, and your state factor for the annual premium.
Things to know
- Third-party EPLI, covering claims from customers or vendors, usually costs extra beyond this baseline.
- A clean claims history and a documented employee handbook are the two levers that move a real quote the most.
- This estimate does not model defense-cost-only sublimits some carriers apply separately from the main limit.
Most small business owners think of EPLI as something big corporations buy. Then they get a wrongful termination claim from a former employee and discover the average defense cost runs $75,000 before a verdict or settlement. The policy covers a wider list than the name suggests: discrimination, harassment, retaliation, failure to promote, wrongful discipline, defamation related to a reference check, and more. It does not cover intentional criminal acts, but it does cover the cost of defending claims that turn out to be unfounded.
Employee count is the single biggest driver after state. Each employee adds statistical exposure, and companies with 15 or more employees become subject to federal employment law (Title VII, ADA, ADEA), which opens the door to EEOC complaints that can escalate into litigation. California, New York, New Jersey, and Washington have employment statutes that go significantly further than federal minimums, which is why the state multiplier matters here more than it does for most other policy types. For broader protection, consider pairing EPLI with a workers' compensation policy and a general liability policy.