INSURANCE GUIDE
Employment Practices Liability Insurance UK
EPLI cover for UK employers - discrimination, wrongful dismissal and harassment claims explained.
TL;DR
- EPLI covers employment tribunal claims including unfair dismissal, discrimination, and harassment.
- EPLI is distinct from employers liability - EL covers workplace injury; EPLI covers employment rights claims.
- Claims can be brought by employees, former employees, and job applicants - EPLI covers all three.
- Most employment claims in the UK are heard by an Employment Tribunal - EPLI covers tribunal defence costs and awards.
What EPLI Covers
Employment practices liability insurance covers legal defence costs and compensation for claims brought by current employees, former employees, and job applicants alleging violations of their employment rights. Common covered claims include: unfair dismissal and wrongful termination; discrimination on protected grounds under the Equality Act 2010 (age, sex, race, disability, religion, sexual orientation, pregnancy); harassment and victimisation; breach of the Employment Rights Act 1996; and failure to follow correct disciplinary or grievance procedures.
How EPLI Differs from Employers Liability Insurance
Employers liability (EL) insurance covers claims by employees for work-related injury and illness - physical harm caused by the workplace environment or a work accident. EPLI covers claims arising from the employment relationship itself - rights violations, discrimination, and procedural failures. Both are needed for comprehensive employer protection. EL is legally required; EPLI is not, but the frequency and cost of employment tribunal claims makes it commercially important for many employers.
Employment Tribunal Process and Costs
The Employment Tribunal is the primary forum for employment rights claims in the UK. Claimants no longer pay tribunal fees (these were abolished following the Supreme Court ruling in UNISON v Lord Chancellor). This removal of the fee barrier has contributed to high tribunal claim volumes. Defending a tribunal claim requires legal representation and generates significant management time costs even when successfully defended. EPLI covers legal costs throughout the process and any award made by the tribunal.
Who Needs EPLI
Any employer with staff faces employment practices liability exposure. The risk is not limited to large organisations - SMEs are frequently targeted in tribunal claims, sometimes precisely because smaller employers have less formal HR procedures. Employers undergoing redundancy exercises, organisational restructuring, or managing long-term sick leave are at higher risk of claims during those processes. EPLI is relevant for any employer with employees, not just large corporations.
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Disclaimer
This guide is for general information only and does not constitute financial or insurance advice. Kaeltripton.com is not regulated by the FCA. Always read policy documents in full before purchasing cover.
Frequently Asked Questions
Is EPLI legally required for UK employers?
No. EPLI is not a legal requirement in the UK. Employers liability insurance is legally required under the Employers Liability (Compulsory Insurance) Act 1969. EPLI is a separate voluntary commercial cover. Given the cost and frequency of employment tribunal claims, many insurers and brokers recommend EPLI as part of a comprehensive employer insurance programme, particularly for businesses with growing headcount.
Does EPLI cover claims from former employees?
Yes. Most EPLI policies cover claims brought by former employees as well as current ones. Many employment tribunal claims are filed by employees after their employment has ended - unfair dismissal claims must be filed within three months of the dismissal date. Claims for historical discrimination or harassment may also be brought after employment has ended. Confirm that the policy covers claims by former employees and that the retroactive date extends to cover past employment relationships.
