Over 60% of
small businesses are failing to protect themselves against legal action by
their employees, despite growing fear over a ‘compensation culture’, research
has found.
The annual
Hiscox Risk Barometer also found that the number of employment tribunals
increased by 15% over the last year, reaching almost 133,000. Claims relating
to unfair dismissal and equal pay were found to account for most cases.
As a result
of the increased appetite for compensation claims, one third of employers have
become concerned that they could end up in court faced with one of their
members of staff.
Gary Head,
director of business insurance for Hiscox said that companies need to protect
themselves against all eventualities: “Most bosses will have considered what to
do if their office burns down, but the fact is they are more likely to be sued
by one of their own employees.”
“By failing
to take out appropriate cover they are leaving themselves hugely exposed to
lengthy and expensive legal action and significant reputational damage,” he
concluded.
© Crimson
Business Ltd. 2008
