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What do new Health & Safety fines mean?

Mon 26th Sep 16

New sentencing guidelines, which came into force on 1 February, are living up to their billing as the most dramatic change in health and safety enforcement for nearly half a century.

Zurich expert Jim Wilkes, Zurich Commercial Propositions, takes a look at how these new guidelines will affect customers.

From February 2016, fines for health and safety (H&S) offences, corporate manslaughter and food safety increased substantially. The increase applies to cases reaching the courts from February 2016, even if the incident that led to the prosecution occurred before that date.

You may not be aware that H&S fines are now based on their turnover. For example, a company with a turnover of less than £2m can now face a H&S fine up to £450,000; between £2m and £10m, the fine can be up to £1.6m, and a company with a turnover of £10m- £50m could face a fine up to £4m. So-called ‘very large companies’ will be subject to even higher fines.

If you are part of a bigger group, it is possible that the court could seek to levy a fine based on total group turnover, and thus increase the level of the fine.

These fines are in addition to court legal costs, and there is also potential for individuals to be imprisoned or disqualified as a director. In the event of a corporate manslaughter conviction, the court may require the offending company to publicise the conviction on their website and other literature. Moreover, the conviction would have to be disclosed on procurement tenders.

The new level of fines is a timely reminder to look at how you approach operational risk management issues such as H&S. How confident are you that your H&S management would be able to withstand a prosecution? Company directors have a duty under the Companies Act 2006 to ‘promote the success of the company’ and to take into account ‘the interests of the company’s employees’ and ‘the impact of the company’s operations on the community and the environment’.

An alleged breach of duty by a company director could expose them to claims under their Directors & Officers Liability policy, a cover that some smaller customers may not have seen as necessary.

A useful document for directors is an IOD/HSE publication Leading Health & Safety at Work  This document is aimed at company directors and includes a health and safety leadership checklist and a guide to further advice sources.

How can we help?

Health and safety failings often relate to damaged or defective equipment. We can offer policies that provide an inspection service covering lifts, electrical installations, pressure systems and other work equipment.

There are also a number of policies available which provide a range of tools which gives customers insights into the key causes of loss in their sector.

To discuss any aspect of this article further or for more information about Directors & Officers Liability cover, please call the Ryan's team on 01473 343491 or speak to your account handler.