Against a backdrop of difficult economic conditions in an increasing litigious society,  there has never been a greater need for U.K Companies  and their directors to have suitable protection from legal actions brought against them.

With many employers being forced to downsize in recent months many insurers have experienced a sharpt rise in claims on its policies made by redundant employees for unfair dismissal or discrimination. With alternative employment hard to come by,  more ex-employees are taking the legal route to resolve their issues, perhaps taking the view that they have nothing to lose by taking their former employer to a tribunal.

Increased protection for employees in the shape of recent legislation has further increased the risk of experiencing legal action, even for the smallest employer.  These regulations include the Corporate Manslaughter Act, greater maternity and paternity rights, and laws forbidding sexual discrimination on the grounds of age, religion or sexual orientation. Further many companies are not aware of their vicarious liability for the actions of their employees;  an “off the cuff” remark made by an employee, even in apparent jest, can lead a company facing expensive legal action,  potentially paying a six figure award if its defence is unsuccessful.

IS YOUR COMPANY PROTECTED?

Standard Directors and Officers’ insurance will cover individual directors and officers against many forms of action.  However, this may no longer be sufficient to protect companies against new and changing laws.  In addition, some policies will respond only when the insurer believes they have a high chance of winning the case. This means that, at the very time you need it most, the cover may not be available, leading to costly, unforseen expenses.

Policy wordings are now avalable that will offer you protection even if the employees case is strong. Management Liability products offer comprehensive protection for UK companies and business owners, including cover to protect against actions from employees and regulators, plus many other areas of potential legal action including shareholder disputes , taxation claims, pollution claims and breach of  data protection rules.

For further details please  contact Richard Gibson on 0116 272 8821 or speak with your regular account executive.