Rippling PEO Review: EPLI Coverage Risks Explained

What Is a PEO and Why Does It Matter?

Before diving into Rippling’s EPLI offering, let’s quickly define what a PEO is.
A Professional Employer Organization (PEO), like Rippling, bundles HR services, payroll, benefits, workers’ compensation, and other coverages into one platform. They also become a “co-employer” of your employees, meaning they share liability with your business.

This setup can be convenient, but it also complicates your insurance needs—especially around employee claims.

What Is EPLI and Why Is It Critical?

Employment Practices Liability Insurance (EPLI) protects businesses from claims made by employees alleging:

• Harassment
• Discrimination
• Wrongful termination
• Hostile work environment
• Other wrongful employment acts

In a co-employment relationship with a PEO, both you and the PEO can be targeted in a lawsuit, so strong EPLI coverage is essential.

Major Problems with Rippling’s EPLI Coverage

After reviewing a real proposal from Rippling, here are the four major concerns every business owner should understand:

1. Extremely High Retention (Deductible)

Rippling’s EPLI policy had a $100,000 retention.
Retention works like a deductible—you must pay this amount out-of-pocket before insurance covers anything, including defense costs.

Question:
Can your business afford to shell out $100,000 for a lawyer or settlement at a moment’s notice?

Most standalone EPLI policies for small businesses have retentions between $5,000 and $10,000, with some even offering zero retention.
Rippling’s $100k retention? Way too high for most small businesses.

2. No Wage and Hour Defense Coverage

Wage and hour claims involve employees alleging violations related to:

• Minimum wage
• Overtime pay
• Worker misclassification

While settlements from these claims typically aren’t covered, defense costs often are.
Most strong EPLI policies include a $250,000 sublimit for defending wage and hour claims.
Rippling’s EPLI policy? No coverage at all.

In today’s legal environment, that’s a big risk.

3. No Coverage for Non-Standard Workers

Rippling’s EPLI policy excludes coverage for claims arising from:

• Volunteers
• “Off-the-books” workers
• Short-term temps
• Independent contractors (“gig workers”)

For businesses that occasionally use flexible labor, this is a dangerous gap.

4. Shared Aggregate Limit of Liability

Rippling’s EPLI has a $6,000,000 aggregate limit—shared by all employers on the platform.
Meaning:

If other companies experience multiple large claims, there could be no money left when you need it most.

While aggregate exhaustion is rare, it’s still a risk worth noting—especially as EPLI claims continue to rise.

So, What’s the Solution?

If you’re evaluating Rippling as your PEO, you have two options:

• Option 1: Stay with Rippling’s EPLI, but be aware of the risks.
• Option 2: Keep your own standalone EPLI policy to ensure better protection—even if you have to pay twice.

At the end of the day, being properly protected should come first, and cost savings should come second.

If you already have EPLI and you’re thinking about switching to Rippling, keep your current policy active unless you’re fully comfortable with the risks.

Final Thoughts: Protect Your Business the Smart Way

Business insurance shouldn’t be confusing or feel like a gamble.
At The Coyle Group, we help companies like yours understand your risks, evaluate insurance offers, and build better protection.

✅ We review your risks
✅ We find coverage gaps
✅ We design smarter policies