By Jenna Sammut
Employment practice liability insurance helps employers minimise the risk and potential cost of claims taken against them by employees. Here’s what it covers and how you can reduce the risk of a claim.
When it comes to your real estate business, I bet you do everything you can to provide exceptional service to your clients. You dot your Is and cross your Ts. You even take the opportunity to go above and beyond whenever you can to meet the needs of your clients.
But have you stopped to think about your employees? Do you know if they’re happy in the workplace? Are flexible working arrangements available to them? When was their last performance review? What are their opportunities for career development?
Employment practice liability
The employment practice liability provisions in a professional indemnity insurance policy are among the most frequently relied upon areas of cover. These provisions are designed to help employers minimise the risk and potential cost of claims made against them by employees. Claims can be related to things like alleged discrimination, unfair dismissal and sexual or workplace harassment, and the costs associated with such claims can be substantial.
At JLT, we see a lot of these claims. They can lead to litigation and potentially result in tens of thousands of dollars being paid out by insurers either as damages or to settle the claim (less the policyholder’s excess). Making a claim against your professional indemnity insurance policy may increase your premium. It may also lead to insurers in the market increasing their technical rating due to an increase in claims across the industry.
The employment practice liability provisions of Realcover’s professional indemnity insurance policy provide cover for:
At JLT, we strongly encourage you to implement the following strategies to help prevent employment-related claims:
- Dismissal or termination
- Breach of any oral or written employment contract
- False or misleading representation relating to employment
- Failure to employ or promote
- Unfair deprivation of career opportunity
- Unfair counselling or discipline
- Negligent employee evaluation or performance assessment
- Workplace harassment
- Employment-related denial of natural justice, breach of privacy legislation, defamation, infliction of emotional distress and unlawful discrimination
Jenna Sammut is an Account Manager at Jardine Lloyd Thompson (JLT). Realcover is underwritten by QBE Insurance (Australia) and managed by JLT.
- Have an up-to-date employment agreement in place for each employee
- Ensure a human resource manual or written management procedures are in place
- Stay up-to-date with changes in employment regulations
- Document all discussions with your employees regarding employment matters to help avoid any misinterpretation
- Provide training for managers and team leaders about human resource procedures
The information contained in this article, which is current as at the date of publication, provides only a general overview of subjects covered. It is not intended to be taken as legal advice or advice regarding any individual situation and should not be relied upon as such. Insureds should consult their insurance and legal advisors regarding specific coverage issues. All insurance coverage is subject to the terms, conditions, and exclusions of the applicable individual policies.