14th April 2009
Redundancy Pressure Increases Employment Claims and Premiums
With ever increasing employment legislation and the current economic climate many employers are facing challenges that they have never had to manage before.
As you would expect some employers, particularly smaller companies, are faced with managing redundancies for the first time. Making staff redundant is a difficult and potentially expensive process and as a result many employers are seeing an increase in unfair dismissal and discrimination claims after failing to follow the correct redundancy procedures.
Helpline usage – ‘all time high’
Over the course of the last six months our Employer Helpline, which is available to all Markel ELP Policyholders and manned by specialist employment solicitors Beachcroft LLP, has been inundated with calls. Unsurprisingly 31% of the callers were seeking assistance in relation to redundancy matters.
Wherever possible they have endeavoured to ‘manage’ each situation and we have received excellent feedback from those who have used the helpline with many claiming it has provided vital support in dealing with Employment issues.
Corrective Underwriting Action
Despite Beachcroft’s best efforts there are invariably situations where employment claims (and tribunals) have ensued and we are seeing a marked deterioration in the claims experience and consequently underwriting results.
Unfortunately we can no longer afford to offer the level of assistance and cover our Employment Law Protection ('ELP') policies provide at the current levels of premium and deductible but, mindful of client feedback, we have decided not to compromise our ‘assist’ services or policy cover.
Clients do seem to value the help and protection that a Markel policy affords them and so we are introducing a more sustainable level of premium and deductible which will allow us to continue serving them. In general terms our revised offering will show an increase in premium and our standard policy excesses will increase to £2,500 (£5,000 for some trades).
Key Points
- The level of claims activity is unprecedented and is likely to continue
- The current economic environment coupled with increasing legislation will not improve matters
- First-class Employer Helpline manned by specialist employment solicitors is a ‘must have’
- Many premiums are still only a few hundred pounds
- Clients do value quality and meaningful service and protection at an equitable price
Employment Law Protection is an essential component of an 'SME's insurance programme and one of the fastest growing – not surprising in the current climate.
For further information please contact your local underwriter or click here