21st May 2018
Alleged breaches of employment law and employment practice violations are not new but recent publicity has made employees more aware of their rights and has forced employers to make it easier for victims to raise their concerns and have them addressed. Laws are continually being updated to provide more causes of action for claimants. Existing laws are also being more broadly interpreted by courts and tribunals and there are also rapidly changing categories of people who are acquiring workplace rights.
Examples of legislation include the Transfer of Undertakings (Protection of Employment) Regulations 1981, Employment Rights Act 1996, Protection from Harassment Act 1997, Malicious Communications Act 1998, Human Rights Act 1998 and the Equality Act 2010. Regulatory bodies such as the Equality and Human Rights Commission also promote and protect everyone’s right to equal opportunities in the workplace.
Employment practices liability insurance, known as EPL insurance or EPLI, provides coverage to employers (including its employees) against claims made by employees for alleged employment violations and breach of employment law such as those alleging:
The above-mentioned exposures would not be covered under an Employers Liability policy because that only addresses claims for death, bodily injury and disease caused to employees.
Large organisations usually have the in-house have resources to deal with all aspects of employee relations. However, smaller companies rarely have their own legal or human resources departments and are, therefore, more vulnerable to losses. Legislation is reviewed and updated on a regular basis, so it can be difficult for an employer to keep up to date with developments but good standard insurance policies include resources which the insurers offer to policyholders, including:
Request a Quotation
Quotations are relatively straightforward to obtain provided that the client has a written grievance procedure in place and does not contemplate a redundancy programme. Cover can be purchased on a stand-alone basis or as an extension to a Directors & Officers Liability policy. Please contact us:
9th May 2018
In a previous article we explained the need for Directors & Officers Liability (D&O) insurance. If someone decides to protect their home against, say, fire and flood why would they not protect it against personal liability arising out of the operation of their business?
Despite the exposure, D&O insurance has not been a cover that all clients have traditionally purchased. Below we look at some of the common reasons for not buying cover and then offer some considerations which may help in the decision-making process.
Objection: D&Os believe that it is the company that will be sued and not them personally.
Response: Often, however, plaintiffs and their solicitors may launch joint actions against both the company and directors personally and, at best, directors will then incur legal costs to have themselves dismissed from the action.
Objection: If sued personally, D&Os will be indemnified by the company.
Response: Directors cannot rely on being indemnified by the company and are, therefore, better protected by ensuring that insurance cover is in force. For example, the company may be bankrupt or may not have the money or the person seeking indemnification may be unable to persuade the management to grant it. The articles of association may only reflect the law as it was before 5 April 2005 if directors have failed to amend them.
Objection: We are too small to have to worry about D&O claims.
Response: Smaller companies may have less resources to support directors’ decision-making processes and to pay for their defence and representation costs if things go wrong. There may be little risk management infrastructure such as in-house legal and compliance teams. For a small company, a D&O claim against one of its Directors can be a major distraction from the day to day running of the business, in addition to financial costs arising.
Objection: We are a family run business so there will be no claims.
Response: Family businesses are perceived as relatively high risk by insurers with potential issues such as family sibling rivalries, divorce and bankruptcy. Family businesses are not immune to claims from regulators, suppliers, competitors, creditors or unfounded and mischievous allegations. Insurers’ added value services of free legal advice and the suite of complementary H.R. documents and procedures can be especially useful.
Objection: We have very loyal customers and staff.
Response: This may be the case but what about claims from regulators, investors, competitors or shareholders? What will be the impact on prospective senior employees if you don’t carry D&O insurance? What about the risk of insolvency and the possible personal liabilities and what about future changes such as your senior leaders retiring with no management liability protection?
Objection: We do not need D&O because we have Legal Expenses insurance.
Response: Legal expenses policies are not suitable substitutes for D&O policies. They often contain “Prospect of Success” clauses, the limits are small in comparison with D&O and would be inadequate for any kind of protracted litigation. Legal Expenses policies often exclude disputes arising in the first 90 or 180 days of inception the policy and they usually prescribe the solicitor which must be used. The Legal Expenses policy may not include Reputation Protection or Public Relations assistance.
Objection: We have robust Health & Safety Procedures in place.
Response: Robust practices certainly help to assist with the result of the claim but do not prevent it being made in the first place. Employment claims are just one of the many exposures that companies and their directors face. Others include regulatory enquiries, creditors actions, insolvency risks and liquidators, official and trade bodies and shareholders.
30th April 2018
If you are a Director or Officer of a company, your personal assets could be at risk if legal action is brought against you for events arising out of the operation of your business.
Legal actions against Directors and Officers are not just restricted to shareholders but could also include creditors, competitors, customers, employees, regulators or government agencies and there are believed to be over 200 ways of breaching the law in the Companies Act alone for which a director can be prosecuted.
Directors & Officers Liability Insurance (D&O) covers the cost of compensation claims made against individual directors &/or key managers for alleged wrongful acts and operates to protect their personal assets in the event of legal actions in areas such as breach of trust/duty, neglect, errors, misleading statements or wrongful trading. The most common causes of D&O claims are workplace injuries, business insolvencies, defence of criminal actions (D&O does not cover deliberate fraudulent acts though), defamation actions, contractual disputes and investigations by regulators against individuals.
The number of company directors prosecuted for health and safety offences continues to increase and it is believed that courts are aiming more for the individual directors than at the business itself. Fines are now routinely reaching £1,000,000 for non-fatal offences and even for those where nobody has been injured, meaning that any breach of the Health and Safety at Work Act is potentially a serious threat to your personal assets.
Please contact us www.chadwickinsurances.co.uk/contact.html if you would like more information or a quotation.
23rd April 2018
Chadwick Insurances will provide a free, no obligation, insurance health check and business insurance policy review. Not all insurance policies are identical and is essential that you check to ensure that your policy cover matches your expectations. As a professional insurance advisor we will assist you in that process by comparing your business risk exposures against the policy terms and conditions and bringing any key gaps to your attention. If you subsequently appoint us as your broker, we will then put together a plan of action to address the issues raised.
For more information or to arrange a meeting please contact us www.chadwickinsurances.co.uk/contact.html but before you provide us with any personal information please ensure that you read our Privacy Statement www.chadwickinsurances.co.uk/privacy_statement.html
23rd April 2018
Business Interruption insurance protects you from loss resulting from interruption or interference with your business because of damage to property but there are also nuances to the cover.
One example is that of the Denial of Access extension which can be particularly important to businesses such as Hotels or Restaurants. What would happen if customers could not access your premises due to an unforeseen event?
The case of Orient Express Hotels Limited v Generali Global Risk in 2010 provides a classic illustration of how the cover can work. Extensive damage was caused to New Orleans because of Hurricane Katrina in 2005 following which the authorities imposed a mandatory evacuation of the city causing significant business interruption losses to local businesses.
The Orient Express claim contained more complex issues due to a dispute about losses arising from damage to the hotel building but in the context of this discussion, the key point is that the hotel's Business Interruption policy included cover for losses arising out of prevention of access and loss of attraction where damage to the vicinity prevented or hindered the Insured's use of the location, whether the hotel itself had been damaged or not.
Insurers paid the Insured's contingent business interruption losses for the loss of attraction arising out of the mandatory evacuation. What would the ramifications be on your business if a local tourist attraction suffered, say, storm damage which directly resulted in loss of income to your hotel or restaurant? Does your insurance policy cover you? A professional insurance broker such as Chadwick Insurances can help you to insure these types of risk. For further information please contact us: www.chadwickinsurances.co.uk/contact.html
12th April 2018
In a recent report http://www.cqc.org.uk/publications/major-report/state-care-independent-online-primary-health-services the Care Quality Commission (CQC) highlighted the need to focus on Heath & Safety within Care Homes. They stated that "patient safety must be at the heart of all decisions around what kind of care is offered and how it is delivered."
At Chadwick Insurances, we support the CQC's focus on patient safety. Not only do we help Care Homes to protect their business with the appropriate level of insurance but we can also help them with their responsibility to keep patients, visitors and employees safe.
Some insurers include Risk Management support as part of their product but in those instances where it is not offered, we have teamed up with Marksafety Ltd to help our clients meet their legal responsibilities for Health and Safety. Marksafety Ltd have 15 years' experience in local authority, construction and manufacturing businesses and the principal, Mark Prince, holds a NEBOSH Diploma and maintains IOSH membership. They have experience in coaching managers of Care Homes and setting up safety management systems, including fire risk assessments. They also offer online courses for staff from only £20 including safeguarding, manual handling and food safety.
Marksafety offer their first hour of consultation free which allows you to tap into their experience and understand more about what they can provide.
Please contact us http://www.chadwickinsurances.co.uk/contact.html if you own or operate a Care Home and would like to know more. We offer a free, no obligation insurance policy review even if you decide not to place your risks via us.
11th April 2018
Customers can sometimes become frustrated when dealing with financial institutions but may not be aware that there are procedures in place that can help them.
Set up by Parliament, the Financial Ombudsman Service is the UK's official expert in sorting out problems with financial services and their website tells you how to start the complaint process: http://www.financial-ombudsman.org.uk/consumer/complaints.htm
The service can consider complaints from not only individual consumers but also small businesses with a turnover of less than €2,000,000 and fewer than 10 employees.
More information can be found here: http://www.financial-ombudsman.org.uk/about/index.html but we will also be issuing future news articles providing more guidance and examples of what Financial Ombudsman Service offers and the implications for insurance buyers.
21st March 2018
On 20th March, Justice Secretary David Gauke unveiled the Civil Liability Bill offering hope of lower insurance premiums to millions of motorists and end to the so called "whiplash culture".
The legislation will set in law measures aiming to reduce the high number of whiplash claims and is part of the government's wider programme to tackle the compensation culture which continues to drive up costs to consumers and taxpayers. Road traffic accident related personal injury claims are 50% higher than a decade ago, despite the fall in the number of reported accidents.
The high number of whiplash claims has contributed to increased insurance premiums and the government believes that these new measures will mean savings which insurers have pledged to pass on to drivers. The government anticipates motorists saving on average about £35 per year as a result and that the measures will ensure fairness to both motorists and claimants by setting fixed amounts of compensation for whiplash claims and banning the practice of seeking or offering to settle whiplash claims without medical evidence.
Also contained in the Bill are changes to the way the personal injury discount rate for serious injuries is calculated. The discount rate is the percentage used to adjust compensation awards for victims of serious personal injury, according to the amount they could expect to earn by investing it and its application is a key part of the calculation of awards.
In February last year the discount rate was reduced from 2.5% to minus 0.75% and this dramatically increased the size of compensation awards to individuals involved in serious and life-changing accidents. There were concerns in some quarters that the changed rate provided more compensation to claimants than they needed and resulted in increased insurance premiums. The government will establish a regular review of the rate, the first within 90 days of the legislation coming into force and at least every three years thereafter.
The government believes that the changes will provide a more balanced approach to compensation that fully compensates victims of catastrophic accidents while addressing issues around overpayment. However, some claimants' lawyers have already expressed their dissatisfaction with the changes.
More information can be found on the government website: https://www.gov.uk/government/news/justice-secretary-unveils-new-bill-to-cut-car-insurance-premiums or by calling your contact at Chadwick Insurances.