May 9, 2022

Employment Practice Liability cover – what is it?

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Employment Practice Liability cover – what is it?

The Cause

British law works on the principal that someone accused of wrongdoing is innocent until proven guilty.  In the workplace this means that when handling a disciplinary issue with a member of staff the employer must follow due process, investigate the allegation and be sure that it is upheld before taking remedial action such as dismissal.

Care regulation does not allow a care provider to employ any person suspected of abusing or harming the people they care for in the same building or area.  This stands to reason, if there is a suspicion that an employee is abusing vulnerable people then a care setting is not an appropriate environment for them to be working in.

The result is that when something goes wrong the employee is often suspended from normal duties with full pay whilst the employer makes an appropriate investigation.

Suspension without pay may lead to an unfair dismissal claim so is often avoided.  This puts financial strain on the business and can have a knock-on effect on the rest of the team who are having to cover additional workload.

The issue

It would be reasonable to expect a care provider to put the interests of its service users at the fore. If an organisation is sure that an employee has taken action to undermine this goal then it may want to remove the person concerned as swiftly as possible in order to minimise the impact to its clients.

Most legal expenses insurance policies offer only limited cover in that they will only cover legal costs of an employment dispute if they deem there to be a reasonable prospect of success, and tribunal costs and awards if their helpline advice (or sometimes the advice of ACAS) is followed. This advice is based on HR best practice, often seen to be cautious and is unlikely to take a direct route to the outcome that the care provider requires.

The solution: Employment Practice Liability Insurance

I would therefore recommend incepting Employment Practice Liability or similar cover.

Employment Practice Liability deals with a dispute without reference to advice precedent or prospects clause – “the dispute has happened so let’s deal with it” rather than “avoid the issue and if it still goes to dispute we’ll take it on, so long as we have a reasonable likelihood of winning”.

Whilst we would not encourage clients to flout employment law, it is important that having acted in good faith, they have the right support if they are involved in a legal dispute for acting solely in the interest of their service users.

The Care sector offers unique challenges – so a broker with appropriate expertise is essential

This issue is a good case in point demonstrating why the care sector presents a unique set of risk issues and challenges. With this in mind, it is important that care providers choose a broker with the right expertise and experience.

GRP runs a Group wide National Care Sector Practice made up of experienced brokers who share knowledge, expertise and insight. Feel free to get in touch with a GRP Group broker for insurance or risk management advice, or to review of your current insurance programme.

Any questions? Please don’t hesitate to contact one of our team.

Stuart.belbin@ascendbroking.co.uk  |  Office: 01245 449067