Cover provided under a directors and officers liability policy can offer protection to the company directors for actions brought not only by disgruntled employees but also administrative actions brought by a regulator or a governmental agency

To guard commercial clients against a wave of Employment Tribunal claims in the UK, Angel Underwriting is cautioning brokers to equip them with proper Employment Practices Liability Insurance (EPLI).

According to the annual report by the Advisory conciliation and arbitration service (Acas), as companies are trying to reduce the number of employees to cope with recession, there is a sharp increase (43%) in the number of employees registering claims with the Employment Tribunal Service. Acas has also reported that there is a 22% increase in unfair dismissal conciliation cases it has received so far this year.

Gary Green, director of business development at Angel underwriting, said: The fall out from a recession is inevitably an increase in redundancies as companies try to weather the storm by making cut backs wherever possible – which is exactly what we have seen across the UK. People’s awareness of their employment rights is on the increase and with unemployment rates in the UK at their highest level for ten years, companies could be faced with significant time and financial implications associated with defending themselves against employment related claims. Even if they are following employment guidelines to the letter prior to making redundancies they could face allegations of wrongful employment practices and incur the cost associated with defending themselves.

This is one of the reasons why we are urging brokers to ensure their SME clients in particular have the right level of EPLI cover in place – which can form part of their Directors and Officers cover. With growing numbers of people being made redundant it is becoming much harder to find new employment, which will doubtlessly result in an increased likelihood of a claim being made,” Mr. Green added.

Angel Underwriting is an independently-owned specialist managing agent, offering brokers across the UK a range of professional insurance products specifically designed for SMEs.