Employment Practices Liability Insurance: What is it and do you need it?
There has been an increase in litigation concerning workplace issues over the past decades, with employment tribunals awarding thousands of pounds for individual claims. This increase in litigation is partially due to employees becoming more aware of their rights and the implementation of worker-friendly employment regulations. Employment regulations affect both small and large businesses, yet many small businesses do not have Employment Practices Liability Insurance (EPLI) cover to protect against these claims.
High Price Tag
Employment-related claims can be extremely costly, especially in cases that drag on for years. Employment regulations are complex and without EPLI, a single claim from an employee could be a costly distraction. A cost that many small businesses cannot afford to pay.
What Puts a Small Business at Risk?
Understandably, it can be much more difficult for small businesses to defend themselves against employment-related claims because they tend to have fewer resources and a different work environment. Small businesses are particularly at risk for employment-related claims for the following reasons:
- Many have a minimal staff and lack of in-house counsel and/or full human resources department to rely on. With an average of around 15 to 20 changes annually to employment regulations, many small businesses do not have the resources to keep current.
- Overall lack of extensive record keeping on employee performance
- More intimate working environments may cause personal riffs
An Affordable Solution
Fortunately, with employment-based legal actions on the rise and the economy’s sluggish upward climb, EPLI cover is becoming more affordable. More insurers are beginning to offer EPLI insurance policies with comprehensive cover to smaller businesses to protect them in tough times.
The good news is that EPLI insurance is becoming more affordable and tailored specifically for smaller businesses.
Talk to Custodian Insurance at 0207 648 4343 to learn whether this risk transfer option is right for your business.
