What insurers need to know about harassment claims

Date published



As the number of harassment claims increases, insurers should consider whether they're best covered under general liability policies or specialist employment policies.

Harassment extends far beyond the rarefied environments of Westminster and Hollywood. More than half of British women (53%) and one-fifth of men have experienced sexual harassment in their place of work or study, according to a recent survey commissioned by BBC Radio 5 Live. Those surveyed had suffered harassment from conduct such as inappropriate jokes to inappropriate touching and indeed sexual assault.

Harassment and sexual harassment, in particular, can present individuals and businesses with significant reputational and economic consequences. So, what can businesses do to protect themselves, and what role do insurers have to play?

Businesses and their insurers need to ensure that robust HR and whistle-blowing policies are in place to deal with sexual harassment allegations. Staff also need to be made aware of a company’s sexual harassment policies. Investment in training is likely to save a great deal of embarrassment and cost in the unfortunate event of a sexual harassment allegation.

There are two ways to pursue such a claim: discrimination legislation (in the Equality Act 2010) renders bullying or harassment unlawful; and under the Protection from Harassment Act 1997.

Statutory discrimination claims

Where discrimination arises from employment, the employment tribunal has exclusive jurisdiction; it can also legislate on psychiatric injury too as a result of the discrimination.

Harassment in a discrimination claim does not require repeat offences and an individual can be guilty of sexually discriminatory behaviour if they engage in “unwanted conduct of a sexual nature” and the conduct creates a degrading, humiliating or offensive environment for the victim.

Discrimination claims offer claimants a better route to obtaining compensation as there is no requirement to prove foreseeability in respect of loss. In discrimination cases, an employment tribunal can award damages for ‘injury to feelings’ and proof of psychiatric injury is not required.

Protection from Harassment Act

Claims can also be brought under the Protection from Harassment Act. While this legislation was introduced primarily to combat stalking, its application has widened to include harassment in the workplace. Under this legislation, employers can be held vicariously liable for the harassment of an employee by another.

The Act requires the harassment to have taken place on two occasions and the conduct must have been both oppressive and unreasonable. Some recent cases have considered the degree of requisite conduct and reduced the threshold of what constitutes oppressive and unreasonable conduct. Derogatory name calling, offensive remarks or jokes and touching people inappropriately are likely to constitute “oppressive and unreasonable behaviour”.

So, what should insurers be aware of?

The increasing number of harassment claims should prompt insurers to consider their policy wordings. With so many of these types of claims being held in the employment tribunal, insurers will want to consider whether it is appropriate for them to be dealt with under general liability policies, as opposed to specialist employment practices liabilities, which will cover harassment, bullying and discrimination claims policies.

Insurers should also check to see whether a claim has been presented in time. Different time limits apply in relation to employment, injury and protection from harassment claims, the latter having a limitation period of six years.

Searching for evidence and documents years after the incident can be difficult, if not impossible, and therefore, it is important that steps be taken after notification of a claim to ensure that relevant documents such as grievance investigations are preserved.

This article was first published in Insurance Post