2025 December 03
Many people are not aware, or may forget, that there may be cover for PGs within their Liability insurance.
If you have Employment Disputes cover, also referred to as Employment Practices Liability insurance, it will help protect you against the financial costs of PGs made by current or former employees.
The policy covers the legal costs incurred in investigating, defending, negotiating, and settling a claim. It is also intended to cover the compensation an employer is legally obligated to pay, following a judgment or settlement with the employee.
Some policies include free legal advice as soon as the claim is notified to the insurer. This is designed to help you follow the correct employment processes and therefore mitigate your risk exposure.
For this reason insurers have experienced, and well-known, firms of lawyers which they access at reduced rates when a claim is made. These reduced rates then help to keep costs down for you.
Here are actual examples of claims we have recently dealt with and the associated costs –
An employee raised a PG against Company A for unjustified dismissal, following a restructure.
The legal costs and settlement payment, which totalled over $20,000, were met by the insurer.
Company A simply paid their excess of $5,000, saving them over $15,000 because they notified us early.
An employee claimed a breach of privacy and unfair disadvantage toward our client Company B, demanding $60,000 in compensation.
The client notified us early and the insurer appointed lawyers.
The total cost, including lawyer’s fees, was $25,500 with company B only needing to pay their excess of $7,500.
The rest of the cost was paid by the insurer, who also did all the negotiations and secured an agreement where the employee resigned, thereby negating any future issues.
As soon as you are aware of a dispute that may result in a PG – notify your ICIB broker immediately. Even if you are not sure if a PG will be filed, it is better to let us know straight away about the circumstances that may give rise to a PG. Early notification helps manage costs and protect your business.
In fact, not notifying us can result in your claim being declined by the insurer, or the amount of costs paid by them being reduced.
If you are unsure whether your liability insurance covers PGs, get in touch with your broker and we will be able to let you know.
If you don’t have it, we can help explore the right options for your business. Call us on
0800 644 444 for assistance.