A Contractor's $340K Wrongful Termination Claim — Why EPLI Matters

A plumbing and HVAC contractor in Florida employed 22 field technicians, three office staff, and two foremen. The company handled residential and light commercial work across the Tampa Bay area, generating $3.8M in annual revenue.

The owner carried general liability, workers' comp, and commercial auto — the standard contractor package. When asked about employment practices liability (EPLI), the owner said, 'I treat my guys right. I don't need that.' The previous broker hadn't pushed the issue.

The owner terminated a foreman after repeated complaints from customers about the foreman's attitude and two documented incidents of showing up late to job sites. The foreman, who was 58 years old and had been with the company for seven years, hired an employment attorney.

The lawsuit alleged age discrimination (replaced by a 32-year-old), wrongful termination (claimed the documented complaints were fabricated), and retaliation (the foreman had previously complained about overtime pay practices). The foreman sought $340,000 — back pay, front pay, emotional distress, and punitive damages.

General liability policies universally exclude employment-related claims. The owner's personal assets — including his home — were at risk. Employment attorneys in Florida charge $250–$450/hour, and even winning the case would cost $80,000–$120,000 in legal fees.

We had added EPLI coverage ($500K per claim / $1M aggregate) when we restructured this contractor's insurance. The policy covered wrongful termination, discrimination, harassment, and retaliation claims — all four allegations in this lawsuit.

The EPLI carrier assigned a specialized employment defense attorney within 48 hours of the claim notification. The carrier also provided access to an HR hotline that the contractor now uses before making any termination decisions — a proactive risk management tool included at no additional cost.

The case settled at mediation for $145,000 — significantly less than the $340K demand, thanks to the experienced employment defense attorney. Legal fees totaled $68,000. The EPLI policy covered both the settlement and defense costs, with the contractor paying only a $5,000 deductible.

The EPLI premium was $3,200/year. Without it, the contractor would have paid $213,000 out of pocket — more than 5% of annual revenue. The contractor now uses the carrier's HR hotline before every termination and has implemented a formal progressive discipline policy.

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