March 15, 2022

EPL claims are notoriously stressful and challenging to businesses as they often happen when trying to continue to conduct business at the same time which is difficult for both the employer and the employee.

Whether it be an Unfair Dismissal claim or constructive dismissal claim, it is the employer’s process that is under scrutiny as well as the behaviour of the parties. Emotions are normally high.

The difficulty from an insurance perspective is that it is common for such claims to trigger two insurance policies depending on how the allegations are set out by an employee ; the Employment Practices Liability policy and often the Employment Liability policy. Both are very different and distinctive wordings that span separate practice areas. However, it is essential from a business and insurance perspective that clients work closely with their insurance and legal advisors to determine the appropriate approach both in terms of the insurance policy response and the overall commercial strategy. It is not uncommon to see an EPL and an EL claim running in parallel but leading to a disproportionate level of time and costs leakage due to a failure to communicate effectively and consider the appropriate commercial response through the legal and insurance layers.

Clients may therefore often need an insurance specialist to seek to navigate these areas which may often need to include dispute resolution mechanisms that encompass both sides of the insurance equation.