Does Your Agency’s Insurance Actually Cover a Harassment Tribunal Claim? Check Before You Assume Yes
Many estate and letting agency owners assume their existing insurance covers a harassment tribunal claim brought by a negotiator or property manager. It may not, or it may not cover all of it. Employer’s Liability Insurance is primarily for workplace injury and disease, not discrimination awards. Directors & Officers cover depends on who is named and what the policy says. And the 25% uplift a tribunal can add in a qualifying sexual harassment claim where the employer breached its preventative duty may fall outside the policy, a gap worth checking in property where staff often work alone with members of the public.
In Short: Employer’s Liability Insurance is not generally designed to cover harassment or discrimination tribunal awards brought by agency staff. Directors & Officers Insurance may cover legal defence and compensation only in defined circumstances. Employment Practices Liability insurance may cover the underlying award, but whether the 25% uplift for a qualifying sexual harassment claim or costs associated with EHRC enforcement are covered depends on the wording. On an illustrative base award of £53,403, the maximum 25% uplift would add £13,350.75; ask your broker what your actual policy would pay.
Key Facts
- Employer’s Liability Insurance is compulsory for most agencies, but it’s designed to cover bodily injury and disease sustained in the course of employment. Do not assume it covers harassment tribunal awards, discrimination compensation or EHRC enforcement costs.
- Directors & Officers Liability Insurance may cover legal defence costs and compensation in specific, defined circumstances; check whether employment claims and any tribunal uplift are included or excluded.
- Employment Practices Liability (EPL) insurance may cover the underlying harassment award, but check whether it covers a 25% tribunal uplift for breach of the sexual harassment preventative duty or EHRC-related costs.
- Using the £53,403 average sex discrimination award in the published 2023/24 statistics as an illustrative base only, a maximum 25% uplift would add £13,350.75, bringing the total to £66,753.75. The average is not an average sexual harassment award, and the uplift cannot be applied to every sex discrimination claim.
- Equality Act discrimination awards carry no statutory cap. The highest sex discrimination award in those statistics was £995,128, but that is not a typical award or a prediction of the outcome or insurance coverage of any individual claim.
Why Employer’s Liability Insurance May Not Help an Agency Here
Employer’s Liability Insurance is a legal requirement for most UK businesses, including estate and letting agencies, and it’s easy to assume it’s a general safety net for anything that happens to staff at work, including during a viewing. It isn’t. It’s primarily designed to cover claims for bodily injury or disease sustained in the course of employment, things like a physical accident on-site or an illness caused by working conditions.
A harassment or discrimination tribunal claim, brought by a negotiator who was harassed by a viewer or a property manager harassed by a tenant, isn’t necessarily a claim for bodily injury or disease. Compensation a tribunal awards for injury to feelings, financial loss or a breach of the Equality Act 2010 may sit outside what an Employer’s Liability policy is designed to pay out. An agency facing this kind of claim should check its policy with its insurer or broker rather than assume it responds.
Directors & Officers Insurance Is Narrower Than It Sounds
Directors & Officers (D&O) Liability Insurance can cover legal defence costs and compensation claims brought against individual directors, but only in specific, defined circumstances set out in the policy wording. For an agency director, it exists primarily to protect them personally from the consequences of decisions made in their role, not to act as a general shield against every employment-related cost the branch might face. Nor is a director automatically personally liable merely because an agency faces a harassment claim; see our guide to director liability under the Equality Act.
Whether a D&O policy covers a tribunal uplift depends on the wording, the claim and the insured party. An agency director who assumes D&O cover closes this gap, perhaps because a claim arose from a solo viewing they knew was unsupervised, should check the policy wording directly, rather than assume it.
Employment Practices Liability Insurance: Closer, But Still Not Complete
Employment Practices Liability (EPL) insurance is the product most likely to respond to a harassment claim brought by agency staff, since it’s specifically designed to cover claims like discrimination, harassment and unfair dismissal. For many agencies, this is genuinely useful cover, and it may pay out on an underlying compensation award.
The question is whether it also covers the 25% uplift where a sexual harassment claim succeeds and the tribunal finds a breach of the preventative duty, and any costs arising from EHRC enforcement action. These costs can be treated differently from the underlying award, and coverage varies by policy. Even an agency with EPL cover in place could have an uninsured cost on top of whatever the policy does pay. Read our Worker Protection Act guide for the scope of that duty.
The Numbers, Worked Through for an Agency
Take £53,403, the published 2023/24 average sex discrimination award, as an illustrative base figure. This is not the average award for a sexual harassment claim. If a sexual harassment claim succeeds, a tribunal finds the employer breached the preventative duty and applies the maximum 25% uplift to a £53,403 award, that adds £13,350.75, bringing the total to £66,753.75. If EPL cover responds to the base award but excludes the uplift, that additional sum would be payable by the agency.
The highest sex discrimination award in that reporting period was £995,128. A hypothetical 25% addition to an award of that size would be nearly £249,000, but only if it arose from a qualifying sexual harassment claim and the tribunal applied the maximum uplift. There’s no statutory cap on discrimination awards, but neither an award nor its insurance treatment can be predicted from a sector average. For a small or mid-sized agency, this is a reason to check exclusions and limits with its broker. See our breakdown of the cost of an employment tribunal claim.
Have you actually checked your agency’s policy wording for how it treats the non-compliance uplift, or are you assuming it’s covered because a harassment claim sounds like the kind of thing insurance is for? Book a free demo to see how The Sentry’s Compliance Portal can help document preventative measures. No software can guarantee that an uplift will not be applied.
Why This Gap Matters in Property
This insurance gap is particularly relevant for estate and letting agencies, where negotiators and property managers regularly work alone with members of the public during viewings. Harassment by a third party, a viewer, tenant or landlord, is a risk agencies should assess and address. The preventative-duty uplift relates specifically to sexual harassment claims, not every incident involving a third party. Similar concerns arise for housing staff making tenant visits, and the applicable insurance terms still depend on the policy.
Where The Sentry Fits for an Agency
The Sentry doesn’t replace your agency’s insurance, and it isn’t trying to. What it can help with is documenting the measures your agency took during solo viewings before an incident occurred. The Sentry’s Compliance Portal can provide records of check-ins, alarm activations, location sharing during active sessions and incident reports, evidence that may be relevant to an assessment of the agency’s preventative steps alongside policies, risk assessments and training.
Insurance can help with the costs a policy is designed to cover. It can’t retrospectively create a record of prevention that didn’t exist at the time a negotiator was on a viewing. That record either exists, dated and verifiable, or it doesn’t.
FAQ
Does Employer’s Liability Insurance cover a harassment tribunal claim brought by a negotiator or property manager? It is primarily designed to cover bodily injury and disease sustained in the course of employment, not discrimination tribunal awards. Check your own policy and the circumstances of the claim with your broker rather than assume it responds.
If our agency has Employment Practices Liability insurance, are we fully covered? Not necessarily. EPL insurance may cover an underlying harassment award, but the tribunal uplift in a qualifying sexual harassment case and EHRC-related costs may be treated differently. Check the specific exclusions, limits and insured parties in your policy.
Why might a policy exclude the 25% uplift? It follows a finding that an employer breached a statutory preventative duty, and some policies may exclude penalties or sums linked to non-compliance. Whether this particular tribunal uplift is covered is a question for your policy wording and insurer, not a universal rule.
Does Directors & Officers insurance protect an agency director personally from this uplift? It depends on whether the director is personally named, the legal basis of the claim and the policy’s definitions and exclusions. Ask your broker rather than assuming a company employment tribunal award is covered by D&O insurance.
What can an agency actually do about a gap that insurance won’t cover? Assess and address the risk: have a documented system for staff conducting viewings alone, a risk assessment, a working reporting channel, training records and monitoring. Such evidence may help demonstrate compliance, but cannot guarantee the outcome of a claim.
Rebecca Evans is COO of The Sentry, specialising in staff safety in the property sector.
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