The necessity for Employment Practice Liability Insurance (EPLI) has arisen in response to a change in the commercial environment. Firms are becoming increasingly vulnerable to litigation through a growing number of claims relating to unfair dismissal, breach of contract, discrimination or working time claims.

The need for EPLI has arisen from the following:

The Government - Fairness at Work Legislation
UK Employment law has undergone its biggest shake up for nearly 30 years and the working environment is being revolutionised.

The European Community:
Many of the changes in discrimination and Health and Safety legislation come from Europe. Consequently UK legislation has been shaped as a result of the direct influence of the EC.

Employment Practice Liability Insurance is designed to protect the company, its directors, managers and employees against a claim brought by any current, prospective or past employee for a broad range of employment related allegations such as:

• Wrongful dismissal, discharge or termination of employment
• Breach of any oral or written employment contract
• Misrepresentation
• Discrimination
• Sexual harassment
• Wrongful failure to employ or promote
• Wrongful deprivation of a career opportunity
• Negligent appraisal
• Defamation
• Wrongful infliction of emotional distress

It may provide protection in the following situations:

• In a civil proceeding, including a tribunal proceeding
• In a criminal proceeding
• In a formal administrative or regulatory proceeding
• In an arbitration proceeding
• On a written demand for monetary damages

EPLI cover can help to fill the gaps in cover, which may exist under Employers Liability, Directors & Officers and Legal Expenses policies.

Claims Examples:

• A financial adviser received a £100,000 settlement from a bank after being diagnosed with post-traumatic stress disorder when he was given extra responsibilities after his staff were cut from 14 to five. The adviser, who regularly worked until 2am, complained to his management that intolerable demands were being placed upon him, but no help was forthcoming.
  
  
• A female investment banker received compensation of £50,000 in an out of court settlement with her former employers for sexual discrimination.
  
  
• A court concluded that an employer must take reasonable care that they do not give an unfair or misleading overall impression of an employee when giving a reference, even if the facts given are correct. An omission or refusal to provide a reference can amount in itself to an act of victimisation.
  
  
• An ex employee believed that she could not get another job because she was not given a reference. She was compensated £195,000. This reflects the significant effect, which the absence of a fair reference can have on a career, the financial loss and high awards of compensation, which it can cause.

In order to protect your company against unwanted employment practice litigation PYV can provide you with a specialist cover to suit your needs.

Next steps?
Contact Angus Ogg
Tel: 020 7626 6789
Fax: 020 7648 5153
Email: angus.ogg@pyv.co.uk