Running a Business? Here’s our Top 6 insurance policies to keep you covered
January 22, 2025
Employment disputes can be costly and incredibly disruptive to a business, especially where senior executives are involved. Management of such matters requires a considerable amount of sensitivity and expertise to ensure as positive an outcome as possible.
If a business already has Directors & Officers Liability (D&O) or Management Liability insurance, then it is likely that the directors and executives will be insured against any claims made against them personally by employees alleging liability for employment-related matters. However, cover will not necessarily automatically apply to the business itself.
In order to ensure your business is covered for employment-related claims brought by employees, an Employment Practices Liability or “EPL” insurance policy should be purchased. EPL policies provide coverage to the employing entity against claims by its current and former employees alleging wrongdoing in respect of their employment.
Matters that can give rise to an Employment Practices Liability claim include allegations of:
• Unfair dismissal
• Bullying
• Harassment
• Discrimination
Key Considerations
There are many factors to consider prior to purchasing Employment Practices Liability insurance. Two key considerations for businesses are:
1. Control
In the event of a claim, your insurer will have the right to assume conduct of your defence and will require one of their panel law firms to be appointed.
If your preference is to maintain control in the event of a claim, we recommend you discuss what you can do prior to any claim arising with your broker.
2. Cost
Employment Practices Liability insurance can be quite costly for larger organisations; especially for organisations that have been recently impacted by claims, and businesses with USA based employees.
To reduce your EPL premium, there are a number of options available to you. One option is to accept a higher excess / retention. By doing so, your smaller (under-excess) claims will be self-insured. They will not impact your insurer, so should not impact your premium. Additionally, for those wishing to retain control, you will not be required to handover conduct of an employment-related matter to an insurer if it sits under your excess.
Employment disputes can be very disruptive and costly for a business. Insurance is available to cover the cost of such disputes, but it is important to consider the pros and cons of purchasing such insurance before doing so.
If you would like to discuss whether EPL insurance is appropriate for your business, please do not hesitate to CONTACT US to schedule a call.
Author: Sam Giorgatzis
