BUSINESS news headlines are often dominated by multi-national corporations with thousands of employees dotted around the world. Indeed, quite a number of the most recognisable global companies have set-up offices here on both sides of the border.
These organisations are vital to the economy and provide employment to many, and it could be argued that small businesses are the life-blood of Northern Ireland.
Small firms account for 99.9 per cent of businesses in Northern Ireland according to the Federation for Small Businesses and provide employment for around 347,000 people.
There are numerous bodies and organisations that can provide assistance to small business owners, but unfortunately, they can be more at risk when it comes to certain issues, and this is often down to a lack of resources.
One such area where small businesses are at greater risk is an increase in litigation concerning workplace issues.
Over the past few years employment tribunals awarding thousands of pounds for individual claims have become more common-place, with this increase in litigation partially due to employees becoming more aware of their rights as well as the implementation of worker-friendly employment regulations.
Employment regulations affect both small and large businesses, yet alarmingly, many small businesses do not have Employment Practices Liability Insurance (EPLI) cover to protect against these claims.
Employment-related claims can be extremely costly, especially in cases that drag on for years. Without EPLI a single claim from an employee may wipe a small business out. Many small businesses cannot afford to pay these costs and keep their company afloat.
Understandably, it can be much more difficult for small businesses to defend themselves against employment-related claims. Small businesses are particularly at risk for employment-related claims for the following reasons:
•Many have a minimal staff and lack of in-house counsel and/or full human resources department to rely on. With an average of around 15 to 20 changes annually to employment regulations, many small businesses do not have the resources to keep current
•Overall lack of extensive record keeping on employee performance
•More intimate working environments may cause personal riffs.
Fortunately, more insurers are beginning to offer EPLI insurance policies with comprehensive cover to smaller businesses to protect them in tough times.
In fact, EPLI insurance is becoming so important to the success of small businesses that it is being offered at more affordable prices and being tailored specifically for smaller businesses.
- John Kielty is commercial insurance director at Autoline Insurance Group (www.autoline.co.uk)
