Broker EPLI scrutiny advised as workplace tribunal cases soar

Brokers have been urged to check clients' employment practices liability insurance (EPLI) cover in the face of soaring workplace tension.

In its annual report for the financial year 2008/09, the Advisory Conciliation and Arbitration Service (Acas) revealed it had received more than 78,000 conciliation cases from the Employment Tribunal Service, almost a fifth (18%) higher than the previous year.

In total, Acas received 55,000 cases that involved a claim for unfair dismissal, a rise of almost 12,000 from 2007/08.

Gary Green, Angel Underwriting business development director, said the recession would inevitably cause a rise in redundancies and, in the haste to make cutbacks, companies were in increased danger of falling foul of employment legislation.

"In the accident arena we have seen the growth of the 'no win no fee' culture. How long do you think it will be before we see adverts on the television asking people 'whether they believe they have been unfairly terminated' and inviting them to get in touch with solicitors to make a claim?" Mr Green asked.

He said that of all the directors' and officers' (D&O) claims it receives, more than half were employment related.

Mr Green said that while D&O covers directors' liability in employment-related matters, EPLI was needed to cover the company itself adding that small to medium-sized businesses, which may not have a dedicated HR facility, were at risk.

According to figures from the Tribunals Service published earlier this year, the number of employment tribunal claims rose sharply to 189,303 in April 2007 to March 2008, an increase of 43% on the 2006/07 figures. The Acas conciliation figures indicated that the 2008/09 employment tribunal claims figures, which are due to be published in September or October, would climb further.

Andrew Swan, associate director of Aon Global Professions, said: "Society has become more litigious and employees are more willing than ever before to take their employers to court if they believe they have been wronged. It is with this in mind that we sell EPLI products."

He said while clients may not have budgeted for EPLI for the current year, he would push for it to be considered in 2010 forecasts as "it's a growing trend".