Financial Lines - Employment Practices Liability

There are very good reasons for businesses of all sizes to consider taking out specific insurance to cover the potential costs of employment practices actions.

Today employees are more litigious than ever. In a world of no-win no-fee legal representation, employment tribunal cases are now in the hundreds of thousands each year. And that’s just the cases that make it to a tribunal instead of being settled out of court.

Cases are getting more expensive as award caps increase annually, and there is no cap at all in discrimination cases. On top of any awards there are defence costs of course, including the employee’s costs if the company loses.

Developing legislation means that there’s a broad range of potential actions to consider including:

• wrongful dismissal or termination

• harassment or discrimination on the basis of sex, race or religion

• employment-related libel, slander or defamation

• invasion of privacy

• wrongful failure to employ or promote and retaliation (where the employee believes that raising a complaint has led to their employer discriminating against them).
  

A lot is expected of employers in their handling of employee actions. The burden of proof lies heavily with employers. Strictly defined disciplinary, dismissal and grievance procedures must be followed otherwise the case could be lost from the start by default. Not keeping abreast of the latest developments and regulations could lead to time consuming and expensive mistakes.

Even unfounded allegations can take time, energy and money to defend. Employment Practices Liability insurance is a means to protect the company and its management by meeting damages, judgements, settlements and defence costs for many employment practice violations.