In today’s ‘compensation culture’, employers are vulnerable to a number of complaints and lawsuits launched by their workers.
An expensive and reputation-damaging legal dispute may not even arise as a result of your actions as an employer, but you may still be held responsible. Key examples of this sort of complaint are bullying, harassment and discrimination. If an employee feels they have been mistreated in any of these ways, causing them undue stress, emotional suffering or other detrimental consequence, they have the legal right to sue the company for compensation.
Legal disputes surrounding bullying and harassment can potentially drag on for months, where the complainant is pursuing compensation and the employer is defending the company’s reputation and finances. This can amount to considerable litigation costs which, when added to any amount of compensation you may have to pay, can financially cripple your business.
This is why it is a legal requirement for employers to have at least a minimum level of professional insurance cover in place for issues involving employees. This can be in the form of the mandatory employer’s liability insurance (Employers Liability Compulsory Insurance Act 1969) which may extend to cover mental illness and nervous shock, or Legal Expenses cover. The latter can cover employment related disputes and some policies extend to cover compensation awards too. This sort of cover can financially protect you in case an employee sues you at any point in the future, provided you renew your policy and have cover in force.