Employment Practices Liability Insurance

From PIA
Tuesday, 14th December 2010 4:45 pm

What could go wrong?

In an evermore complex world of rules, regulations, do's, don'ts and employees who know the rules sometimes better than their employers. Watch Out!!

Naturally we are all hopefully wanting to do our best by these rules and regulations and indeed most employers would wish to make sure that the people they employ, (often the company's best assets) are also protected.

However, the pure truth of the matter is unless you are a solicitor specialising in Employment Law or an expert in this field, the likelihood of a claim being made against a company and or it's directors from an employee becomes very real, with a whole raft of areas to consider such as

1. Racial Discrimination
2. Sex Discrimination
3. Age Discrimination
4. Unfair Dismissal

Just a few areas to give an employer or indeed an employee enough reading and understanding of a system and laws to last a life time!

So what can be done to protect both the employer and the employee, where each may be compensated in the event of a wrong doing from either party? Employment Practice Insurance cover, or 5/7 years studying Employment Practice Law?

When you're running a business, small, medium or large, the more staff you employ the higher the risk of you falling foul of these incredibly complex, and it has to be said overkill on regulations. Many of which have been brought about by EU directives.

Larger companies and organisations have the luxury of a full time HR Department, updating them on all the laws, regulations and rules to abide by, they also have trade unions who can help the employee through the various rights and protections they are entitled to.

Middle size companies may very well have the same resources and or maybe an Employment Practice consultant to help them through the maze of heavy regulation, however, smaller companies with maybe up to 50 employees very often struggle to keep up to date with the hot off the press next regulations they must abide by.

One thing for sure is it is unlikely that any company directors running their business, large, medium or small who would be able, (hand on heart) to know all the rules that they are expected to adhere to when employing staff and it is for this reason that all company directors, when taking on their jobs as directors should do the following:

1. Get at least briefed by an Employment Practice Consultant about the various regulations you are meant to be applying to your good business practice. This doesn't have to take all day, but you need a good basic knowledge of what is expected.
   
2. Either appoint an EPL Consultant to update you regularly or appoint and make a member of your staff responsible to you, and to keep you informed.
3. Make sure your current company procedures are up to date or get them checked. Where there are gaps, fill them quickly.
4. Make sure all Senior Directors/members of your staff are at least briefed of what is expected of them and their treatment of staff and indeed themselves got that procedure written down and updated and signed off by staff and directors.
5. Here is the BIG one, make sure you have suitable insurances in place to protect the company and it's directors against possible claims, legal costs and damages that maybe bought against them. Don't forget whether you were in the right or wrong, you still may have to defend a claim. Legal costs now are very expensive and can be protracted.

What do you need to cover yourself? We think most companies need a full policy to include the following
Tpes of insurance:

1. Directors & Officers Insurance, (D/O), (E/C)
2. Entity Cover, (E/C)
   
3. Employment Practice Insurance, (EPL)
   
4. Crime
   

You need to obtain these types of insurance to protect Directors and the company against claims being made against them for such things as Companies Act, Insolvency Act, Unfair Dismissal, Health & Safety at Work Act, Data Protection Act, Consumer Protection Legislation, Company Directors Disqualification Act, Wrongful Trading, EU Directors, Racial, Sex, Age, Disabled Discrimination etc etc.

Not convinced, not worth the money, well think about this, the average solicitor charges £350 per hour. Directors & Officers policies start as little as £450 for £1,000,000 indemnity.

What type of cover do you get, depends on the policies you need. We suggest you consider the following:

1. Directors & Officers Insurance - (D/O)
2. Employment Practice Insurance - (EPL)
3. Entity Cover
4. Crime
5. Possible requirement for Professional Indemnity Insurance - (PII)
6. Public & Employers Liability

Call Professional Insurance Agents Ltd on 01323 648000 where we will be happy to discuss in depth your own company requirements. Professional Insurance Agents Ltd is a specialist broker dealing with financial lines and commercial lines for businesses. We can offer both full broking service and Quote and Buy Online 24/7 across a wide range of commercial and business insurances.

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