Why Buy Employment Practices Liability Insurance?
Any organisation can face allegations and lawsuits for an employment related dispute. How can EPL mitigate this risk?
Whilst Employers are legally required to purchase Employers Liability Insurance it is a common misconception that such policies also provide protection for employment related disputes, when all Employers Liability policies actually exclude this form of cover.
Any organisation can face allegations and lawsuits for an employment related dispute. Smaller organisations can be particularly vulnerable as they may lack the expertise and the experience to properly oversee the management of Employees and other key HR Functions, increasing their exposure to these types of claims.
Employees rights to be treated fairly are protected by a raft of legislation designed to protect Employees on a myriad of issues such as sickness, flexible working (including working hours), sexual orientation, race, age, religion, data protection, redundancy, pay, maternity and paternity rights, disciplinary matters and harassment.
Employment Rights Bill
Whilst this new legislation has not yet received Royal Ascent, the Government recently published a roadmap for implementation. This outlined that changes will be implemented in phases over the course of the next two years.
This new Bill will introduce an array of additional rules and regulations, and even those Organisations with robust policies and procedures can be faced with allegations from a disgruntled Employee. This Bill will bring about an ever-greater visibility of employment related litigation with workers more aware of their rights than ever.
What are common examples of how EPL claims can arise?
Unfair/Wrongful/Unlawful Dismissal
An ex-employee alleges that the procedures required leading to their dismissal were not followed and will have the right to take this to tribunal.
Discrimination
An employee alleges they have been treated less favourably because of a protected characteristic. There are nine protected characteristics defined under the Equality Act. For example, age, disability, race, sex or religion. Claims for discrimination are not just limited to employees; a job applicant can also make a claim for discrimination if they feel the reason they were unsuccessful was due to a protected characteristic and not their ability to carry out the role.
Harassment
Claims arising from allegations of sexual harassment or based on other protected characteristics, or by co- workers.
Breach of any written or oral Employment Contract
Employees can potentially bring an action for breach of contract where they allege their employer did not meet the agreed terms of employment such as pay, benefits, workload or, were not given sufficient resources that were necessary to carry out the role.
How can Employment Practices Liability Insurance assist?
Employment Practices Liability Insurance is designed to protect an Organisation against actions brought, or allegations made in relation to employment matters. Policies typically provide cover for damages, judgements, settlements, verdicts and defence costs.
Coverage is available either as an extension to a Management Liability Policy (D&O) or as a standalone policy.
The most comprehensive policies will extend to provide additional support services designed to assist Policyholders. These will typically include access to legal advice and online document libraries.
How can PIB Insurance Brokers help?
PIB has exclusive policy wordings which afford a very broad level of protection. Premium levels are competitive, and cover is available for a wide range of industry sectors.