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Home CCI > News > Employment Practices Liability insurance - a case study

Employment Practices Liability insurance - a case study

Failing to report an unfair dismissal claim causes unnecessary issues

​​Last year, one of our Catholic school clients received an unfair dismissal claim from a former teacher. Instead of informing CCI immediately, the school chose to deal with the Fair Work Commission (FWC) without our support.

It was only when things didn't go to plan at a conciliation hearing that we were contacted. By then, the situation we could have efficiently helped to resolve had become unnecessarily complicated and, potentially, financially damaging.

​It doesn't matter who's wrong or who's right

The dispute began when a former teacher at the school lodged a complaint with the FWC. He alleged his dismissal was harsh and that there was a lack of procedural fairness.

In formally responding to the FWC, the school justified its actions by stating the teacher did not meet key performance indicators or adhere to class plans.

The dispute was brought to a conciliation hearing and the matter resolved when the school, even though it believed it had acted appropriately, agreed to pay the former teacher a $10,000 settlement.

This was not the result the school anticipated. Panicked, the school's business manager contacted CCI to find out if its Employment Practices Liability policy covered the payout. That was 6 weeks after receiving the unfair dismissal claim.

Technically, the school had breached one of its policy conditions by not immediately notifying CCI that a claim had been made against it. (In fact, policyholders are obliged to notify CCI even if they suspect a claim could be made against them.)

By choosing not to involve CCI from the beginning, the school's management had inadvertently jeopardised its cover and, as it was about to find out, created a huge amount of work for itself.

Stepping in to help out

CCI wasn't about to leave a client in the lurch. But finding a positive outcome would place significant burdens on the school - because a case for compensation had to be painstakingly pieced together, retrospectively.

​Three months were needed for management and staffers to be interviewed, and for all documentation relating to the case to be submitted. It was an intense period that drained resources at the school and took an emotional toll on its workforce.

David Campbell, CCI Team Leader, Liability Claims, says "In the end, CCI was able to refund the $10,000 settlement the school paid out. But they were fortunate. In some cases like this we can't always refund a client's full expenses and they wind up financially prejudiced.

"Had CCI been contacted when the claim was made, the entire process could have been conducted in real time. We could have saved the school all that work, and all that stress.

"CCI could also have provided legal representation for the school at the conciliation hearing, or in court if necessary, which can safeguard against expense blowouts.

"It doesn't matter if you think you're in the right or not. The sooner we know of a claim, or a potential claim, the sooner we can help. It's that simple."

Need more information?

If you'd like more information about Employment Practices Liability insuranc​e, please contact your Account Executive or contact CCI on 1800 011 028. For more information on the importance of reporting incidents, visit​ 

You'll also find links to a range of free resources including fact sheets, templates for creating reports, and guides for developing risk management plans.




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