EPLI vs. Cyber Liability: Which One Covers AI in the Workplace?

AI is blurring the lines between HR and IT. When workplace AI tools cause harm, which policy responds: Employment Practices Liability Insurance (EPLI) or Cyber Liability?

What EPLI covers

Employment Practices Liability Insurance protects employers against claims by employees related to workplace practices. Common claims include:

• Discrimination (age, gender, race, disability)
• Harassment or hostile work environment
• Wrongful termination or failure to promote

When AI screening or monitoring tools introduce bias, EPLI is often the first policy in question. See our guides on AI hiring discrimination and AI creating hostile work environments.

What Cyber Liability covers

Cyber Liability Insurance is designed for data breaches, hacks, and technology-related losses. Typical coverage includes:

• Data theft or exposure
• System downtime from cyberattacks
• Regulatory fines for security failures

If an AI tool suffers a prompt injection attack or leaks employee data, cyber liability is more relevant than EPLI. Learn more about cyber vs. AI liability coverage.

Where AI creates overlap

• Discriminatory AI hiring tool: Likely EPLI, but disputes may arise if the tool was compromised by a cyber event. See AI hiring beyond resumes.
• AI chatbot leaking applicant data: Likely Cyber Liability, but lawsuits from rejected applicants may point back to EPLI.
• AI monitoring system biased against a group: Primarily EPLI, though insurers may argue exclusions apply if tech vendors are at fault. Related risks in AI employee monitoring.

Takeaway

No single policy cleanly covers all AI risks in the workplace. Employers should clarify with brokers how EPLI and Cyber Liability interact, and whether endorsements are available to close gaps. When in doubt, assume both may be tested in a claim. Start by asking your insurer these five key questions about AI risk.