Employment Practices Liability Insurance for Restaurants in South Carolina

By Brad Davis, CIC (August 9, 2025)

Running a restaurant in South Carolina is more than just serving great food and providing top-notch customer service. As a restaurant owner, you're also an employer – and that means managing staff, scheduling, payroll, and workplace policies. While you may do your best to create a positive work environment, employment-related disputes can happen at any time.

That's where Employment Practices Liability Insurance (EPLI) comes in. EPLI is designed to protect your restaurant from the high costs of defending against certain employee claims. For many restaurants, this coverage is just as essential as general liability or workers' compensation.

In this article, we'll explain what EPLI is, why it's especially important for South Carolina restaurants, and how you can protect your business from costly lawsuits.

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What Is Employment Practices Liability Insurance?

Employment Practices Liability Insurance is a specialized coverage that helps protect employers from claims made by employees (or sometimes applicants) alleging wrongful acts related to their employment. These can include:

• Wrongful termination

• Discrimination (age, race, gender, disability, etc.)

• Sexual harassment

• Retaliation

• Invasion of privacy

• Negligent evaluation

• Failure to promote or hire

• Mismanagement of employee benefits

Even if you believe your restaurant has done nothing wrong, defending yourself against these claims can be expensive. EPLI helps cover legal defense costs, settlements, and judgments (up to your policy limits).

You can read more about "What is employment practices liability insurance (EPLI)?" from Insurance Information Institute.

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Why Restaurants in South Carolina Face Higher EPLI Risks

The restaurant industry has unique challenges that can increase the likelihood of employment-related claims:

1. High Turnover Rates – Restaurants typically have higher employee turnover than many other businesses. With frequent hiring and terminations comes a greater chance of disputes.

2. Diverse Workforce – Many restaurants employ a mix of full-time, part-time, seasonal, and temporary staff, often from varied backgrounds. While diversity is a strength, it also means policies and training must be consistent to avoid misunderstandings.

3. Customer-Facing Environment – Servers, bartenders, and other staff regularly interact with the public, which can create situations where employees feel harassed or treated unfairly — either by coworkers, managers, or even customers.

4. Youth Employment – Many restaurant workers are younger and may be less experienced in workplace expectations, leading to more disputes or complaints.

5. Fast-Paced Work Environment – Stressful shifts and busy hours can sometimes lead to poor communication or quick decisions that might be perceived as unfair.

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Real-World Example: The Cost of an EPLI Claim

Imagine you terminate an employee for repeated tardiness. The employee claims they were actually being discriminated against because of a disability and files a lawsuit.

Even if you have clear documentation showing the termination was performance-based, you'll still need to hire an attorney to defend your restaurant. Legal fees for employment cases can easily exceed $25,000 to $50,000, and that's before any settlements or judgments. Without EPLI, you'd be paying those costs out of your own pocket.

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What EPLI Covers (and What It Doesn't)

Most EPLI policies for restaurants in South Carolina cover:

• Attorney fees and legal defense costs

• Settlements and judgments (up to policy limits)

• Claims brought by past, present, or prospective employees

However, EPLI typically does not cover:

• Criminal fines or penalties

• Workers' compensation claims

• Wage and hour disputes (although some policies offer limited coverage for this)

• Liability covered under other policies (like General Liability or Liquor Liability)

It's important to review your policy carefully with an experienced insurance agent to ensure you understand your coverage and any exclusions.

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How to Reduce Your Risk of Employment-Related Claims

While EPLI provides financial protection, prevention is always the first line of defense. Restaurant owners can reduce the risk of employee claims by:

• Creating a clear employee handbook with documented policies on harassment, discrimination, and workplace conduct.

• Providing regular training for managers and staff on employment laws and respectful workplace practices.

• Keeping thorough records of hiring, performance reviews, promotions, and disciplinary actions.

• Treating all employees consistently to avoid the appearance of favoritism or discrimination.

• Acting promptly when an employee raises a concern or complaint.

Good management practices won't prevent every claim, but they can help strengthen your defense if a dispute arises.

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Is EPLI Expensive for Restaurants?

Many South Carolina restaurant owners are surprised to learn that EPLI coverage can be quite affordable, especially when added as an endorsement to an existing business owners policy (BOP) or package policy. *There can be several differences between EPLI offered on a stand-along policy vs. as an endorsement, and by the different insurance providers.

Premiums vary based on factors like:

• Number of employees

• Annual revenue

• Claims history

• Type of restaurant and operations

In many cases, the annual cost of EPLI is far less than the cost of defending just one lawsuit.

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Why Work With a Local South Carolina Insurance Agent

Not all EPLI policies are the same — and restaurant owners need coverage tailored to their operations. A local independent agency like Davis Insurance Associates understands the restaurant industry in South Carolina and works with multiple carriers to find the right fit for your budget and risk profile.

We can help you:

• Compare EPLI quotes from top carriers

• Understand your coverage options and limits

• Identify other key restaurant coverages, such as General Liability, Liquor Liability, Workers' Compensation, and Commercial Property Insurance

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Protect Your Restaurant From the Unexpected

The restaurant industry is rewarding, but it comes with risks — including those from within your own team. Employment Practices Liability Insurance gives you peace of mind knowing you have protection if an employee claim threatens your business.

If you own a restaurant in Myrtle Beach, Charleston, Columbia, or anywhere in South Carolina, now is the time to review your coverage. Don't wait until a claim happens to find out you're not protected.

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Contact Davis Insurance Associates today to learn more about EPLI for restaurants and get a customized quote.

📞 Call: 843-213-0000
🌐 Visit: Our EPLI page at thinkdavisinsurance.com, or our Food & Beverage Insurance page at thinkdavisinsurance.com