The UK is seeing a marked rise in work-related stress claims. But according to industry experts, today’s allegations are no longer driven solely by traditional factors such as overwork, bullying, or strained relationships with managers. Instead, claims are becoming broader in scope and increasingly complex.
This shift signals a significant exposure for employers, insurers, and brokers alike, particularly as impending regulatory changes, such as those introduced by the Employment Rights Bill 2024, place a greater duty of care on organisations to proactively manage workplace wellbeing.
According to Barbara Goddard (pictured), disease and workplace stress claims specialist and partner at Clyde & Co, warned that claims are rising in volume and changing in character. “We’re now seeing a broader range of allegations, where psychiatric injury is added onto claims that traditionally wouldn’t have included a mental health component,” she told Insurance Business.
A notable rise in claims involving housing disrepair is a key example. Historically, Goddard said, such cases involved physical concerns like damp or poor living conditions. Increasingly, claimants are now also alleging psychological harm caused by these issues.
“We’re seeing residents add elements of stress, anxiety, and depression to complaints against local authorities,” Goddard explained. “This is a departure from the classic employer-related stress scenario and shows how mental health claims are expanding into wider occupational injury territory.”
Additionally, employee awareness of mental health, supported by greater media coverage and cultural shifts, is contributing to the willingness to bring claims. Goddard noted that where she would previously see around three significant stress claims in a year, it is now common to see six or more for the same period.
Hybrid and remote working have added another dimension. While isolation alone has not driven the uptick that some analysts previously forecast, the lack of physical oversight and the difficulty in detecting signs of fatigue or emotional distress remotely has complicated employers' ability to identify early warning signs.
The Employment Rights Bill 2024, coming into force in 2026, is expected to significantly increase employer liability for workplace misconduct. The Bill introduces a positive duty on employers to take “all reasonable steps” to prevent sexual harassment, shifting the focus from reactive to proactive risk management.
“This change means employers won’t just be expected to act when a complaint arises,” Goddard said. “They will be required to demonstrate clear preventative measures. We anticipate scenarios where failure to do so could lead to negligence claims, which may spill over into stress and psychiatric injury litigation.”
Legal experts anticipate that the regulatory emphasis on prevention will also extend the scope of employers’ responsibility in areas such as mental health, potentially driving up claims if organisational measures are found to be inadequate.
As a result, insurers are increasingly being called upon to assess whether mental health-related claims fall under traditional bodily injury definitions. While most occupational stress claims still require a medically recognised psychiatric injury to trigger cover, policy response may be tested as claimants seek damages for anxiety or stress that fall short of full diagnosis.
“This is an area where insurers may need to revisit policy wording,” Goddard said. “Modern claims often seek compensation for broader stress or anxiety, and it may not always be clear whether these trigger coverage under existing terms.”
The growth of claims from local authorities and landlords, combined with higher litigation activity from claimant solicitors targeting seasonal or fixed-term employment dynamics, could also create aggregation risk for insurers.
Experts agree that proactive risk management is now essential to reduce both the frequency and severity of claims. This includes:
“Visibility and contact are key,” Goddard emphasised. “When people are working remotely, it's harder to see if they look tired, upset, or distressed. Employers need systems in place to monitor well-being and escalate concerns before issues become claims.”
With stress claims now being layered onto wider complaints, and with regulatory changes on the horizon, employment-related mental health exposure is expected to grow as a long-tail liability class.
Blanket approaches to well-being “won’t be enough,” in this landscape, Goddard warned. “Employers will need tailored, documented procedures… and insurers will need to be ready for a more complex claims environment than what we’ve seen before.”
