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Employment Practices Liability – So you have your Directors & Officers Liability in place, you have added the Entity extension and now the only thing left to add is Employment Practices protection.

Why would you add this liability section to a Directors & Officers policy, well firstly we have to assume that the insurer you are dealing with will add employment practices cover in the first place. You will probably find that the D&O insurer will be covering some Employment/Tribunal cover anyway but chances are it will be restricted. Taking out Employment Practices Liability will give you the full protection under the policy, its written specifically for what it says it does on the tin.

But hang on, you already have Employment/Tribunal cover under your Commercial Legal Protection policy that you have just paid £xxx.xx for. Do I need the cover twice you may be asking? Well yes and no… Uhh?

Firstly a Commercial Legal Expenses (CLE) policy will cover you for some things that the D&O won’t and vice-versa, what you need to be aware of though is that your CLE policy will have the chances of success clause attaching which means that if the insurer/solicitor thinks there is going to be less than a 51% chance of success then they won’t deal with the claim for you, they may assist you with advice but they won’t indemnify you. Be aware though that some Directors & Officers Liability policies may have the same, so remember… CHECK IT OUT!

Typically you will be covered for:

Employment Disputes
Compensation Awards
TUPE Protection
Conditional Helpline – direct line to qualified persons
Legal Defence

An alternative is Employment Law cover in isolation, we generally deal with one of our specialist partners for this and more about them will follow in a future post.

Finally, Employment Law is a minefield, our legal colleagues just love the fact that you have failed in your obligations and will delight in pointing this out on behalf of your (ex)employee. Don’t give them the chance, it will cost you money!

The above is for information and guidance only and should not be relied on for individual circumstances and professional advice must always be sought specific to your individual circumstances and requirements. Finally any and all comments referred to anywhere on this site is for the United Kingdom (UK) market only.