Brokers are being urged to reposition management liability from a discretionary add-on to a core part of SME protection
A sharp rise in UK employment tribunal claims is piling pressure on SME directors and raising questions for brokers and insurers about how well smaller clients are protected against management and employment-related risks.
Official Ministry of Justice (MoJ) figures showed that single Employment Tribunal (ET) claims have risen sharply year-on-year, while disposals have not kept pace, contributing to a growing backlog and longer case durations. Employment lawyers reported that more claims are running for a year or longer, driving up legal costs and management time.
This translates into higher frequency of employment-related disputes, extended claim lifecycles and increased defence costs – all core drivers of directors’ and officers’ (D&O) and employment practices liability (EPL) losses.
Legal reforms set to extend the “runway” for claims
The employment law landscape is also shifting. The Employment Rights Act 2025 will extend the limitation period for bringing most employment tribunal claims from three months to six months, bringing many rights into line with equal pay and statutory redundancy time limits. The reforms are intended to improve access to justice but are widely expected to increase claim volumes.
During the passage of the Employment Rights Bill, commentators warned that longer time limits and broader protection for workers could add further...
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