Tribunal Indemnity Insurance – Do you need it?

What is Tribunal Indemnity insurance? 

Depending on what level of insurance you take out, the cover can range from full legal and compensation costs arising from a tribunal, to legal costs only. 

As with any insurance policy, the cover relies on you (the business owner), following very strict guidelines and rules. Failure in any of these, could result in the policy being invalidated. This would leave you to seek additional costly and lengthy legal advice. 

Tribunal indemnity companies rely on the conception that Employment Law is complex, full of loopholes and is firmly on the side of the employee. This means many small to medium sized businesses believe that a tribunal is time consuming and costly.  

For most business owners it is not easy to calculate the cost and risk of a tribunal, therefore they opt for the easy option of taking the insurance.  

Do you need the insurance? 

First and foremost, WeDo HR Support advise all our clients to check what insurances they already have in place. Most public/employers liability insurance covers you for legal costs resulting in a tribunal claim, so to double up on this insurance could be an unnecessary cost. Nevertheless, all insurance policies have strict rules and conditions so they will take some scrutiny to fully understand your level of cover. 

If you are a leader that inspires and recognises your staff, it may well be that you will never find yourself in a tribunal situation. Ultimately the decision is yours. 

How do I know what option is right for my business? 

Expert HR professionals can advise businesses on regulations and compliance that need to be followed. By taking a proactive approach in staff management and implementing the right policies and procedures that are relevant to your business, you can greatly reduce the risk of a tribunal claim.  

Prevention is key! 

Your trusted HR Professional can implement training and coaching for you and your staff, mitigating any potential problem that could have arisen with a small issue not being handled correctly. 

If a situation has escalated to a point that a tribunal claim looks likely, your HR provider should be on hand to walk you through the many stages. If you have followed your providers advice, you have already implemented the right policies and procedures, then the claim should have little success in court. 

So, our advice is firstly, check what insurance you have in place initially. Then speak to a trusted HR professional about your current documentation and procedures. This will confirm your compliance but most importantly that they reflect you and your business. 

A good HR provider will be able to keep you within the rules of your insurance policy by following all current legislation to the full, therefore negating the need to pay for an additional policy.  

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