The increase in employees winning record awards in employment tribunals shows the necessity of taking out Employment Practices Liability Insurance (EPLI), says insurance law firm Reynolds Porter Chamberlain (RPC).
According to RPC, tribunal claims have increased 25% in the last year, and the amounts being awarded are escalating.
They cite the example of Julie Bower who recently sued her City employer for sex discrimination and unfair dismissal, winning £1.4m in damages.
Employment partner at RPC Geraldine Elliott commented: "The size of these claims has grown to the point that the impact can no longer be absorbed as a normal cost to a business. It really can have a materially adverse effect on a company's long-term performance."
Employers are not even safe if they are wrongly accused, Elliott points out: "Even if an employer wins a tribunal, legal costs are not normally recoverable. Taking out EPL cover is no longer simply a comfort blanket for employers. It is a growing necessity in this new environment, where the shift in the balance of workplace power appears to rest firmly with employees."
