United Kingdom

Employment Practices Liability Insurance: A Critical Risk Management Tool for Employers in the Modern Workplace

Coronavirus (COVID-19) ushered in a new way of working, allowing employers to test alternative working arrangements and support their employees’ long-term wellbeing. However, challenges continue to evolve, many of which disproportionately affect women in the workplace. Alongside navigating “the Great Resignation” and the gender pay gap, employers are becoming increasingly aware of their duties to employees, such as those going through menopause or who have experienced miscarriages. Organizations should be taking steps to develop workforce resilience to help address these issues. If they do not adapt to the changing risk landscape, they may face claims from employees on a number of different grounds.

EPL (“Employment Practices Liability”) insurance is a powerful tool that can help in the event of an employment claim. The costs of defending an employment claim can escalate quickly, and EPL insurance can help cover employment tribunal costs, including settlement sums, damages, defence costs and investigation costs. Cover is also available for public relations expenses, limiting the reputational damage a company may suffer when responding to an employment claim. Even dealing with unmeritorious EPL claims can be extremely costly in terms of legal costs, management time and damage to a company’s brand.

Although some Directors and Officers (“D&O”) insurance policies include cover for employment-related claims, this cover will usually only be provided for an “insured person” and not the company itself. The majority of EPL claims are against the company (or include the company as a respondent). Therefore, EPL cover in a D&O policy should be carefully reviewed to ensure it is adequate.

COVID-19 and the New Hybrid Working Structure

COVID-19 has undeniably changed working life, and there is the potential exposure for employers to COVID-19-related EPL claims as workforces adopt a new hybrid working structure. The end of the furlough scheme has been challenging for employers as they have had to manage employees’ return to the office and respond to new flexible working requests.

New working models may unintentionally create a two-tier workforce between homeworkers and office workers – where homeworkers with protected characteristics (such as age, sex, disability etc.) are not given the same responsibilities and opportunities. The potential for employment liability claims from homeworkers becomes more probable if, for example, some groups such as women or younger workers are choosing to work at home such that they can demonstrate they are disproportionately impacted as a result of the two-tier treatment.

Employers will have to carefully consider how to deal with any absences relating to “long-COVID” and be mindful that there is a potential for long-COVID to be classified as a disability under the Equality Act 2010, meaning an increased risk of disability discrimination claims if an employer fails to manage absence or an inability to manage a normal working day appropriately. The Advisory, Conciliation and Arbitration Service (ACAS) has advised employers to pre-empt this and focus on the reasonable adjustments they can make for employees suffering long-COVID, including making changes to the workplace and providing additional equipment and services to affected employees.

The Gender Pay Gap

The Equality Act 2010 (Gender Pay Gap) Regulations 2017 (“The Regulations”) came into force to promote greater pay equality. The Regulations require employers to publish the mean and median gender pay gap between their employees for both pay and bonuses and the proportions of male and female relevant employees in the lower, lower-middle, upper-middle and upper quartile pay bands. Although reporting is an important way to assess and uphold commitments to diversity, equity and inclusion, greater transparency around gender-based pay brings increased risks of equal pay and sex discrimination claims.

Given the current focus on ESG (Environment, Social and Governance) credentials, an organization’s gender pay gap is an increasingly important factor for companies. Employers face pressure from investors, customers, employees, and government regulation to close the gender pay gap. If a company has a significant pay gap, it will be expected to explain why and be clear on how it plans to close the gap going forwards.

In addition to the gender pay gap, companies should be considering collating data about the ethnicity of their staff and reporting their ethnicity pay gap to improve transparency and ESG credentials. Whilst there is no legal requirement in the U.K. for companies to report their ethnicity pay gap, some companies have voluntarily started to report these figures. The Government announced in March that it does not intend to introduce mandatory ethnicity pay gap measures, but it will publish guidance for those companies voluntarily reporting their ethnicity pay gap to improve consistency in reported data.

The Great Resignation

In the wake of COVID-19 and recent seismic shifts in the labor markets, social, economic and technological pressures are converging with new organizational trends in an evolution referred to as the Great Convergence. In Aon’s Global HR Pulse Survey1 - conducted in January 2022 - 58 percent of survey participants reported more turnover of skilled technical professionals than any other level of worker in recent events. The U.K. alone is experiencing the highest rate of resignations in over a decade.

As a result of the disruption caused by COVID-19, individuals have re-evaluated their career and lifestyle choices and experienced the benefits that flexible working can bring. Interestingly, 45 percent of Americans said they would either quit their job or immediately start a remote-work job search if they were forced to return full time to offices, according to a recent GoodHire study2.

In order to support a company’s workforce – their most valuable asset – employers need to reconcile the relationship between their employees’ work and private lives in ways that promotes a more sustainable working life for their employees. Companies have the opportunity to work with employees to align their working models with what matters most to them – their home lives, aspirations, skillsets and more.

To retain talent, employers might wish to consider implementing attractive hybrid or remote working options and additional incentives such as increasing compensation and offering additional benefits, including wellbeing initiatives, mental health support, improved training and upskilling and providing a pleasant working environment. A focus on diversity, equity and inclusion objectives and gender pay gap is increasingly important, as employees consider these commitments when looking for new roles.


A 2019 survey conducted by BUPA and the Chartered Institute for Personnel and Development (CIPD) found that three in five menopausal women were negatively affected by their menopause symptoms at work, and almost 900,000 women in the U.K. left their jobs because of menopausal symptoms. The U.K. Parliament’s “Menopause and the Workplace” Inquiry3 noted that this could mean women are leaving businesses “at the peak of their experience” and their exit could lessen diversity at executive levels and exacerbate the gender pay gap.

Those going through menopause may have no noticeable symptoms whilst others will suffer fatigue, depression, anxiety, hot flushes, poor concentration and other symptoms that can seriously affect performance at work. Menopause is not a protected characteristic under the Equality Act 2010, but if an employee is treated less favourably because of their menopause symptoms, this could amount to discrimination due to a protected characteristic such as age, sex or disability.

There have been a number of recent employment tribunal claims4 against employers for failing to meet their duties to employees going through menopause. Tribunals are taking menopause claims seriously, which should be at the forefront of employers’ minds.

Proactive steps companies can take to support those going through menopause and avoid potential claims include educating the workforce with internal campaigns and external speakers, implementing a menopause policy and conducting risk assessments. There may be a stigma in talking about menopause, and businesses need to take the lead in starting open conversations and scheduling training sessions to break down the barriers and raise menopause awareness.


Tragically, 1 in 4 pregnancies end in miscarriage. There is no legal requirement for employers to pay miscarriage leave to women or their partners. Research by Imperial College London5 found that a month after experiencing a miscarriage, nearly a third of women suffer from post-traumatic stress, a quarter experience moderate to severe anxiety and 10 percent suffer from depression. There is a societal stigma around miscarriages, and this is a problem in the workplace because some employees going through a miscarriage do not feel comfortable talking to their employer or colleagues and consequently struggle at work. Failure to support employees who have experienced a miscarriage could lead to a drop in performance levels and increased annual leave or sick leave. There is also the risk of sex and pregnancy discrimination claims if employees experiencing a miscarriage are treated detrimentally.

Recent legislative developments such as Jack’s Law in the U.K. (which introduced statutory parental bereavement leave for employees who have a stillbirth after 24 weeks) and new miscarriage legislation in New Zealand, which allows parents three days paid leave if they suffer a miscarriage, have raised the profile of this issue.

Some companies have already announced extra support for employees who have experienced miscarriages, which will undoubtedly be greatly appreciated and promote staff loyalty. Employers can take steps in this area by introducing a clear miscarriage policy offering paid miscarriage leave and building a work culture where miscarriage is freely discussed, and employees experiencing a miscarriage feel confident that they will receive the support they need.


Converging pressures are creating a challenging operating environment for businesses. Leaders will need to take steps to address immediate challenges and build long-term workforce resilience.

Businesses can take proactive steps, such as implementing policies and training to address issues such as menopause and miscarriage. Prevention is the best cure, but even top employers risk employment claims and should thoroughly explore the protection offered by EPL cover.

Following recent conversations, we are aware some key markets are looking to start writing EPL (mainly in the U.K. and Ireland), and new EPL wordings are being finalized. If you have any EPL queries, or wish to discuss EPL insurance, please speak to your usual Aon broker.


1 Four Strategies to Win and Retain Talent Amid the Great Resignation | Human Capital Solutions Insights (aon.com)

2 https://www.goodhire.com/resources/articles/state-of-remote-work-survey/

3 Menopause and the workplace - Committees - UK Parliament

4 Donnachie v Telent Technology Services Ltd (2020) and Rooney v Leicester City Council (2021)

5 Posttraumatic stress, anxiety and depression following miscarriage and ectopic pregnancy: a multicenter, prospective, cohort study - American Journal of Obstetrics & Gynecology (ajog.org)


Becky Beasley

Coverage Specialist - Financial & Professional Lines
Global Broking Centre