Management Liabilities

What do you do in an employment dispute? What are your rights during a dispute? What changes have been made to various bills, such as the Employment Act 2002, the Race Relations Act, the Disability Discrimination Act and the Sex Discrimination Act? These are all questions and areas that we at Rigby Financial can help with. An up-to-date employment practice liability insurance policy can protect you from a wide-range of claims made by employees, be they on grounds of sex, race, disability, religion, belief or sexual orientation. These claims are not only damaging to your company’s reputation, they can also be very costly. So how do you protect yourself financially against a claim? The answer is with an EPL policy. Rigby Financial can find the right cover to suit you. We can suggest an adequate policy that will protect your company against financial losses and costly legal fees from all manner of areas. The right EPL policy can cover the cost of your defence, awards, settlements and legal representation. For more information on employment liability insurance, speak to one of our expert handlers.

If you own a company or run a business, corporate legal liability insurance is vital. This type of cover protects a company from claims made for ‘wrongful acts’. But what counts as a ‘wrongful act’ in employment terms? This could be anything from a breach of contract to copyright infringement or other intellectual property. The introduction of the Corporate Manslaughter and Corporate Homicide Act 2007 has also put a spot light on corporate legal liability insurance. So what does it cover? Like many of these work insurance policies, a CLL can cover the cost of your defence and other legal fees.

What else is classed as a wrongful act? Libel, slander, trespass and breach of contract all come under the term of wrongful acts.

These examples illustrate how important Directors and Officers Liability Insurance is and how it can be of real benefit.

• A director was sued by one of his distributors for a deliberate breach of an exclusive agreement between both parties. It was alleged the director had used commercially sensitive information, afforded to him by this agreement, for personal benefit. The costs incurred successfully defending this claim ran to over £100,000.
• Liquidators sued a director of a company that had failed with losses of£1.5 million. The director had genuinely believed the firm to be profitable but the case was still found in the liquidators’ favour. This was due to the director’s negligence in failing to ensure accurate financial records were kept.
• The Health and Safety Executive took an action against all the directors of a construction company, following their refusal to respond to a notice to control dust emissions. The directors responsible had missed their deadlines so action was taken against both the company and the directors responsible. The case incurred over £150,000 in defence costs.
• A full-time director defrauded the company and the non-executives were found to be negligent. The negligence was due to insufficient attention being paid to the operation of the firm. The claim was settled for an undisclosed sum and was paid out of the non-executives’ personal assets.
• A director was prosecuted after a construction worker was killed after falling from a significant height during overnight work. The construction company director was ordered to pay £21,000 in compensation to the family of the deceased.

When considering the amount of corporate liability cover you need, it is important to understand that every organisation is different. The recommended amount of coverage will differ depending on the company and type of work you are conducting.

Most insurers will offer a starting sum of £1 million up to around £10 million in cover, which would be the maximum payout in the event of a claim – although this can vary from business to business.

Corporate liability insurance is a lot higher than others forms of insurance, as insurance companies take compensation expenses into account, which could include loss of earnings, medical costs, post-care, repairs and more.

Companies who deal with the general public on a daily basis should consider taking out much larger insurance cover. This is recommended as they are more exposed to public liability claims, especially if it is a high-risk work environment such as a construction site.

You may also consider taking out additional cover to protect and secure contractual obligations, as some clients or third parties may only work with you if you have a certain amount of insurance coverage. This protects both you and them from any damaging implications and enables economic growth.

You should always ensure that you invest in the insurance cover that is best suited to your business needs. Too little cover will result in your company paying out extensive compensation costs. Whereas, too much cover may be unnecessary and is, therefore, a waste of expenditure.