21-05-2007
New legislation to prompt company insurance reviews
The Corporate Manslaughter Bill is likely to lead many firms to review their company insurance policies, experts believe.
Under the proposed legislation, which is expected to be passed this summer, companies will face a criminal conviction and unlimited fines in the event that senior managers are found guilty of gross failure following an investigation into a fatal accident.
Standard company insurance policies will not cover the costs of a firm's defence of an allegation of management failure leading to the death of an employee or third party, Bytestart reports, and many firms will therefore need to obtain more comprehensive policies.
Callum Taylor, management liability underwriting manager at Hiscox, said that the legislation could lead to companies facing prosecution in areas not previously considered.
"An example of this could be a company's failure to ensure its employees' cars are kept in a roadworthy condition when being used in the course of their employment, even in cases when employees are using their own cars," he revealed.
"Add to this a general increase in claims from other regulators, employees, shareholders, investors and creditors and it is easy to understand why many UK companies and their directors are becoming more nervous."
Official figures released last month revealed a significant rise in the number of workplace deaths, leading to an escalation of calls for employers to be held accountable for health and safety failings.
