Coverzones Says Government plans could drive up litigation against UK businesses

Government plans to protect vulnerable workers in what it described as the "dark corners of the labour market" may drive higher levels of litigation against businesses according to Steve Davis, Chief Broking Officer at Coverzones.

Under the new plans a Fair Employment Enforcement Board will be established to promote collaboration between government enforcement agencies such as HM Revenue and Customs, the Employment Agencies Standards Inspectorate, the Gangmaster's Licensing Authority, the Health and Safety Executive and DEFRA.

The new initiative will be launched with a £6million advertising campaign to raise awareness of employment rights and how to enforce them, and a helpline for workers to report abuses to enforcement agencies.

'The Government believes that employers operating lawfully will have nothing to worry about' says Davis, 'but this will not necessarily be the case in terms of increased litigation and administrative burden for businesses'.

According to Davis, 'the publicity generated by the new scheme is likely to drive an increase in grievances, inspections and employment tribunal claims - some genuine and others merely 'nuisance claims' by disgruntled ex-employees.

Business owners will need to re-evaluate their views in respect of the risk of litigation' says Davis. To date, a lack of awareness, time, money and determination means many workers do not take a complaint to an employment tribunal. This is likely to change if Government enforcement agencies are involved and the volume of claims will consequently rise. Businesses will incur legal costs in the event of a claim and these will need to be covered, even if the claim is ultimately unsuccessful.

The cost of claims made against businesses could also increase substantially. 'A claim made by just one worker could spark a broader investigation by a government agency with the power to impose its own penalties, including criminal sanctions.

Many business owners do not realise for instance that the Health and Safety Executive can impose a fine of £2500 for every day that their business fails to produce a valid Employers Liability Insurance certificate' states Davis. 'Employers should ensure that they have the correct business insurance in place and review the level of cover provided by their policies'.

For more information or to apply for a small business insurance quote online please visit the Coverzones website.

About Coverzones

Coverzones provides a business insurance comparison service catering to the specific business insurance needs of UK SME's. Launched in June 2008 and with over 800 trades covered, Coverzones already has the support of the UK's leading insurance providers including Allianz, AIG, Brit, Hiscox, MMA, Groupama, Travelers, Sagicor, HCC, Ambient and Flatfish.

An FSA regulated company, Coverzones provides small businesses with a free online comparison service. Users simply fill in one form online, detailing their specific requirements and the Coverzones service does the rest; displaying up to 6 competitive quotes with each new enquiry. At just one click of button, customers can buy the policy which best suits their specific business needs without leaving the site.

A free MyCoverzones account is also available, so there is no need to re-enter information year in year out. The convenience of a MyCoverzones account allows users to store all their small business information in one place, saving both time and money. Full quotation and policy documents are delivered automatically and can all be saved and downloaded from a secure MyCoverzones account.