Leading employers' liability insurers fear there will be an increase of claims after the European Union introduced new anti-discrimination laws this week.
The UK government has agreed to implement a European Union (EU) directive that has widened the parameters of anti-discrimination legislation to include religion, sexuality, and age.
The new laws will be implemented over the next six years.
Royal & Sunalliance (RSA) casualty insurance manager David Williams fears the directive could blur the line between employers' liability and employment practices liability.
He said they would make it easier for employees to prove that any discrimination they may have suffered was closer to psychological injury, covered by employers' liability, than injury to feelings, covered by employment practices liability.
“Laws to make sure people aren't discriminated against, which is very right, also just make it so much easier to claim,” Williams said.
QBE employers' liability specialists Iron Trades corporate risks manager Giles Quartly expected claims brought under the new legislation would initially fall into the employment practices area.
“The effect on employers' liability is less clear,” Quartly said.
“This new legislation could encourage employees to bring associated employers' liability claims for psychological ‘injury' against their employers in an increasingly litigious environment.”
Federation of Small Businesses spokesman Stephen Alambritis said the long introduction period would give companies enough time to adapt their practices to fit within the laws.