Company directors can be held personally liable for a variety of events that fall outside of their control. The Companies Act 1985 lists over 200 offences alone, and that is only scratching the surface. Add in the Health & Safety at Work Act, EU Directives and ever increasing consumer protection legislation and it’s easy to see why the potential for litigation against directors has never been higher.
One year after new sentencing guidelines for health and safety offences, corporate manslaughter, and food safety and hygiene offences came into force in February 2016, the number of health and safety prosecutions against directors has tripled and UK businesses have seen a dramatic rise in the value of health and safety fines.
In fact, in 2016, the 20 largest health and safety fines totalled £38.6 million. This is a significant increase, especially when compared to the previous two years, whose 20 largest fines totalled £13.5 million in 2015 and £4.3 million in 2014. The total value of health and safety fines imposed on businesses increased by 43 per cent in the six months since the new guidelines were introduced, according to research from global law firm, Clyde & Co.
These new guidelines place a much higher burden on directors and senior managers for ensuring health and safety in their organisations, and make it increasingly likely that they could go to prison for both intentional breaches or a flagrant disregard for their responsibilities.
Avoid these new debilitating fines by conducting a thorough risk management and health and safety review of your premises and policies. In addition, you should solicit the input of your employees, since asking them to identify their health and safety concerns can be invaluable in finding hazards that would not have been obvious to upper-level managers.
Directors & Officers insurance gives directors comprehensive protection against the costs of defending litigation and any damages that may ensue from the actions against them. Having the right insurance in place can sometimes mean the difference between a business being able to continue trading or not.
Contact A-Plan today to ensure that your organisation is properly protected.
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