Brace for wave of legal action, Beazley warns employers
‘In recessions, businesses lay off more people and therefore they get more discrimination claims’
EMPLOYERS could be hit with a wave of discrimination claims as Covid layoffs mount, an insurer has warned.
Businesses should brace for a surge in legal action as redundant workers claim they have been unfairly dismissed, employer liability provider Beazley says.
An avalanche of claims could trigger a massive hit to insurance firms which are already facing turmoil from other coronavirus payouts and a plunge in the value of their investments due to the stock market crash.
Andrew Horton, the chief executive of Beazley, said: “Generally in recessions, businesses lay off more people and therefore they get more discrimination claims.” Mr Horton said that
Beazley was restricting the amount of employers’ liability cover it sold to avoid a major fallout.
Beazley, which also sells event cancellation and professional indemnity products, fell to a pre-tax loss of nearly $14m (£11m) in the first half of 2020 – down from a $166m profit in the same period last year.
Net investment income slumped to $83m from $170m a year ago but still beat City expectations. It has also axed its interim dividend.
The FTSE 250 firm raised $300m from investors in May to use as a buffer amid fears of $170m in claims arising from Covid-19.
Beazley also intends to use the cash to drive growth as it seeks to capitalise on rising insurance premiums.
The company wrote nearly $1.7bn of new business in the first six months of the year.
That compared with less than $1.5bn in the first half of 2019.
Shares closed up 6pc at 456.4p.