What is Employment Practices Liability?
Employment Practices Liability Insurance, or EPL, protects your business against the financial and legal impact of claims made by employees for harassment, discrimination, wrongful termination or other torts you may be at risk of as an employer. Even if you go on to win the case as the result of such a claim, the costs, financial and otherwise, can have a serious impact on even large companies, so EPL is vital for your business
Why you need Employment Practices Liability
It is important that no business overlooks this risk, particularly in today’s litigious society where claims against employers are on the rise, yearly. One claim alone could unfortunately close the doors for good on a small business.
Wrongful employment practises
How would you fund the legal costs and awards made against you?
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What are the sources of risk?
Why choose Ascend for your Employment Practices Liability insurance?
We offer employment practices liability as a stand-alone policy or as an additional section to our Directors & Officers policy.
We provide flexible EPL insurance coverage with expert loss control services, using the benefit of our underwriter’s knowledge.
In addition, we provide legal assistance services regarding employment practices and the duties and responsibilities of directors and officers. For more details of this assistance service, click HERE.
Offers of employment
Training and orientation of new employees
Performance reviews
How company policies are enforced
Termination
What does Employment Practices Liability insurance cover?
Employment practices liability insurance covers you and your directors, board members, trustees and employees for claims brought by any current, former or prospective employee of yours, made during their employment, or the employment process by you. The policy will pay up to the limit of indemnity shown in the policy schedule, including any legal costs incurred.
A policy will cover claims for:
Wrongful, unfair or constructive dismissal
Breach of written or implied contract of employment
Wrongful deprivation of a career opportunity
Harassment
Unlawful discrimination
Defamation or invasion of privacy
It will also pay for:
Legal representation costs in relation to other official examinations, enquiries and investigations
Losses arising from any injunction brought by the Equalities and Human Rights Commission
The trouble with employment legislation…
The reality of current legislation means that if there is a people problem, the balance of protection is tipped very much in your employee’s favour. You certainly need your wits about you.
The Employment Act 2002, the Race Relations Act, the Disability Discrimination Act, the Sex Discrimination Act and the Equality Act (to name but five) exist to ensure employees are treated fairly. They also give them enforceable rights if they’re not. Or even if they think they’re not.
Those acts protect employees’ interests when it comes to such things as flexible working, maternity and paternity, holiday, sickness, sexual orientation, race, age, religion, working hours, data protection, redundancy, pay, disciplinary and grievance, harassment … the list goes on.
But with so many rules and regulations to fall foul of, it doesn’t take much to trip up and find yourself with a disgruntled employee and a legal case to answer.
How employment practices liability insurance can help
So what can you do?
A good HR department or consultant can keep on top of the legislation and help you stay on the right side of it. But many small businesses can’t afford either of those.
And if you’re hit with accusations of, say, wrongful dismissal or racial discrimination, all the HR support in the world won’t pay for your day at the employment tribunal. Or for the thousands of pounds of compensation you could be liable for.
There must be something else.
Well, a fraction of the cost buys you employment practices liability insurance. If you find yourself fending off an employment-related claim, it’ll buy you a solicitor’s expertise, pay your legal costs and pick up the tab for any awards to the claimant.
a former employee and Territorial Army volunteer, made redundant by his employer, claimed against a director. He alleged he’d been let go because he’d been called to serve in the Gulf.
a finance director was named in a case by a former employee. She alleged he’d made her job unbearable through sexual harassment and other inappropriate behaviour, including sending texts outside work hours and inviting her on nights out.
an office manager sued her employer after finding out her male colleagues with similar skills and experience earned loads more than her. It cost the company almost £12,000 in compensation.
an employee is dismissed for breaching company email policy. However, it transpires that the company didn’t follow the proper process when they let him go and were ordered to pay him five-figure compensation.
Legal fees and expenses for any official investigation by the
– Equal Opportunities Commission (UK)
– Commission for Racial Equality (UK)
– Equal Employment Opportunity Commission
There is no limit to the maximum sum that can be awarded to an employee claiming discrimination and harassment, so the balance-sheet protection provided by an employment practices liability insurance policy is invaluable.
Employers coverage for all eventualities
This insurance covers organisations against financial risks resulting from claims based on employment related discrimination and harassment.
It also covers wrongful termination of contract and non-compliance with data protection laws.
Frequently Asked Questions
A type of liability insurance covering wrongful acts arising from the employment process and policies.
EPL protects against litigation, including claims of sexual harassment, discrimination and wrongful termination.
EPL is necessary to protect your business from employee-related claims and allegations.
- The price of EPL depends on the work your business does, the risks your employees face and the level of cover you choose.
- Employer’s liability insurance covers claims by employees who have been injured or fallen ill on the job. Employment practices liability insurance covers lawsuits by employees accusing your business of wrongful treatment.
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Who to speak to?
Stuart Belbin Cert CII
Please contact Stuart Belbin, who heads our charity division, for all charity enquiries. Stuart has been specialising in EPL Insurance for a number of years and would be more than happy to discuss your needs. Stuart’s contact details can be found below or, if you would prefer, please complete the contact form at the bottom of this page and Stuart will contact you at your convenience.
Account Executive
M: 07736956221 E: stuart.belbin@ascendbroking.co.uk
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