Can you afford Employment, Regulatory and Third Party claims?

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Your business is ten times more likely to face a claim from one of your existing or former employees than have a fire. A shocking statistic but not surprising when you consider the current difficult economic climate and the vast array of employment legislation businesses face.

Through 2009/10 employment claims jumped 60% reaching 236,000. This sobering statistic is costing U.K. businesses, even those with the best of defences, claims that regularly exceed £10,000. These sizeable awards are often made by tribunals, with average awards for disability discrimination claims topping £50,000. Adding to a business’ financial cost is the lengthy process of dealing with a claim and the potential reputation damage among employees and customers.

The increase in claims is of such concern that the Government’s ‘enterprise czar’ Lord Young has reportedly suggested they introduce charges for employment tribunals. The aim would be to protect businesses by reducing the number of illegitimate or repeat claims made by employees.

Beyond employment, the law has tightened in areas such as health and safety (including corporate manslaughter) and tax. In addition the anti-bribery laws have been extended to punish businesses and directors who have not prevented bribery within their organisations. It’s easy to predict we will see a greater number of U.K. businesses, and their owners, being investigated and prosecuted for suspected wrongdoing.

Every decision you make may expose your business and you personally to expensive legal action from employees, investors, shareholders and other third parties who are ever more aware of their rights. Insurance policies are now available that can help to protect management, providing:

  • Cover for the legal costs of claims and awards (not fines or penalties) made against your business and/or you
  • Access to a free employers’ helpline operated by one of the U.K.’s leading solicitors
  • No limit on the number of claims in any one year

Insurance cover is available to private limited companies, charities, clubs and associations.

Information contributed by AXA Insurance

Last reviewed 31/3/2011

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