Employment Practices Liability

Employment Practices Liability

What does it do?
Employment practice liability insurance protects both a company and its employees when they become legally liable to pay claims made by employees or any applicant for employment.

Why do you need it?
Due to complex legislation surrounding employment related issues, employers are finding themselves being sued by employees for issues such as unfair dismissal/termination, sexual harassment and discrimination.
This is evidenced in 1999 when Recruitment Solutions conducted a survey of 1,000 medium-sized businesses regarding unfair dismissal issues. It was found that one in three companies had been hit with an unfair dismissal claim in the past 12 months. The highest incidences were in Sydney being 36 per cent, followed by Melbourne with 32 per cent.
This report is in line with The Department of Workplace Relations' "Changes at Work" survey which reported that 1 in 6 workplaces experienced a sexual harassment complaint and 1 in 17 a racial harassment complaint.

Who is covered?
The insured refers to two distinct parties:
Insured entity - the company and its subsidiaries as specified in the scheduleInsured person - a past, present or future natural person; i.e., director, secretary, executive officer or employee (other than deemed employees)

What is covered?
Expenses generally covered by employment practice liability insurance include:
damages
compensation
interest and costs
defence Costs
backpay arising from an order of reinstatement

Some definitions:
wrongful act - claims made by employees, contract workers, temporary workers or any applicant for employment for wrongful refusal to employ, wrongful failure to promote, wrongful demotion, wrongful termination, sexual harassment, unlawful discrimination, oral or written libel/slander or violation of privacy.

claims made - Insured becomes aware of a circumstance, and is notified to the Insurer during the policy period

territorial and jurisdictional - worldwide excluding USA/Canada; i.e., a wrongful act committed anywhere in the world excluding USA/Canada and action brought anywhere in the world excluding USA/Canada

wording interpretation - in the event of any dispute arising from policy interpretation, laws of the Commonwealth of Australia and the relevant state will govern this policy

Key elements in underwriting
Underwriting information is detailed in the proposal form as part of the full wording of the policy. Specifics addressed include:
HR procedures
number of employees
staff turnover rate
employer Initiated Terminations - redundancies/closures
salary range of employees
industry/occupation
length of time in business
claims history

Please contact us with any further details....