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Employer Protection Insurance is designed, as the name suggests, to protect employers against claims made by their employees. If you employ at least one person, then you should already have Employers’ Liability Insurance in place (this is a legal requirement and if you do not have it when you should, you may be liable for a hefty prison term and an unlimited fine). But Employers' Liability Insurance only covers the costs relating to a claim for compensation for injury or illness caused at work However, there are many other types of claims for compensation that employees can make, and this is why you also need Employer Protection Insurance. Employer protection insurance is a product that any employer can take out to protect themselves and their business against a claim made by an employee for things other than personal injury. So, for example, an employee or former employee may try to claim that they have been discriminated against, or that they have been unfairly dismissed. Those employees can find easy and often free access to legal advice through ‘no win, no fee’ agreements with their solicitors. Employers faced with a claim of negligence, discrimination or bad practice can find it very difficult to find similar terms on which to employ a solicitor and have to pay a high hourly rate for advice and representation. This is where employer protection insurance comes in. It is designed to cover the legal costs that you would otherwise face if one of your employees were to ever make a legal claim against you. This type of insurance is often offered through solicitors’ firms and usually includes access to legal advice and help with dealing with the employee’s initial correspondence as well as representation if a claim is actually made through the courts. Some also offer to review your employment policies and procedures when you take out the insurance, in an effort to minimise the risk that you will have a successful claim made against you. Employees are aware of their legal rights and we live in a culture where compensation claims are the norm. Even if an employee ultimately loses their case against you, without Employer Protection Insurance in place you will have had to pay significant legal costs to defend your position throughout the case. If the employee were to win their case, then you would be liable to pay their legal costs as well as your own, plus whatever amount they were awarded (or whatever amount was agreed out of court). These sums can be unaffordable for most SME employers, and taking out Employer Protection Insurance is crucial to ensure that their business can continue in the face of a claim being made. Employer Protection Insurance could protect you and your business against claims by employees for discrimination, breach of contract, constructive or unfair dismissal, harassment, failure to promote or employ, defamation and any other similar action. Your employees are likely to have affordable access to justice: taking out Employer Protection Insurance puts you on an equal footing.
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