Regular readers of The Advocate may recall HUB’s article, Understanding the Meaning of Pay Transparency Laws, on pay transparency legislation that highlights a wave of laws requiring employers to publicly disclose salary ranges and benefits. These measures were introduced, in part, to address racial and gender wage disparities, grounded in a straightforward premise: Employees who know what a job pays are better equipped to negotiate fair compensation. The expectation was that greater transparency would help “level the playing field,” particularly for groups that have historically faced pay inequity.
At the time our first article was published, pay transparency was gaining traction, with laws in place in just eight states, covering approximately one-quarter of the total U.S. workforce.
The landscape has continued to evolve. As of 2026, 17 states plus Washington, D.C., have enacted active pay transparency laws, currently covering an estimated two-thirds of the U.S. workforce, and approximately 10 additional states have introduced legislation that has yet to be signed into law. No federal pay transparency standard currently exists in the United States.
As these laws proliferate, claims are beginning to surface, and with them so are questions about insurance coverage. It appears that a split has occurred in how insurers are responding to pay transparency claims brought under employment practices liability (EPL) policies. Some carriers have indicated that pay transparency allegations do not fall within the definition of a “wrongful act” as defined by the policy, while other insurers have interpreted the policy more broadly to extend coverage. The key takeaway: Pay transparency claims should be carefully analyzed both by the specific facts alleged and the wrongful act definitions in their EPL policy. Where coverage is denied, there may be grounds to challenge that position.
In recent months, the industry has started reacting to pay transparency claims. Some carriers have added pay transparency to the definition of the wage and hour claims; thus, including some limited defence coverage if the policy has a wage and hour endorsement for defence costs. At least one carrier has excluded pay transparency claims outright via endorsement. This trajectory mirrors the insurance market’s response to claims under the Illinois Biometric Information Privacy Act (BIPA) earlier this decade, when a surge in litigation prompted carriers to rein in their exposure. Employers and risk managers would be wise to monitor how this coverage area develops.
HUB’s professional liability specialists can help your organization stay up to date on pay transparency regulations and find coverage options that best meet your enterprise risk strategy. Connect with a HUB ProEx Specialist to review your policies and identify opportunities to strengthen your approach. View more articles in HUB’s ProEx Advocate Articles & Insights Directory.
NOTICE OF DISCLAIMER
Neither HUB International Limited nor any of its affiliated companies is a law firm and therefore cannot provide legal advice. The information herein is provided for general information only and is not intended to constitute legal advice as to an organization’s or individual’s specific circumstances. It is based on HUB International’s understanding of the law as it exists on the date of this publication. Subsequent developments may render this information outdated or incorrect, and HUB International has no obligation to update it. You should consult an attorney or other legal professional regarding the application of the general information provided here to your organization’s specific situation and particular needs.