Can you afford to be without Management Liability cover?
- The Health and Safety Executive (HSE) in 2013/14 issued a total of 10,119 notices, a 15% increase on the previous year.
- They prosecuted a large number of companies for health and safety breaches in 2013/14, leading to a conviction rate of 94%, and total fines received of £16.7m.
- The HSE also generated a further £9.6m from the FFI scheme. This was substantially below the £17 million it had budgeted to recover and this can only bode badly for businesses as they attempt to eliminate the shortfall
This came into effect on the 1st October 2012 under the Health and Safety (Fees) regulations 2012.
Our insurers Management Liability policy covers Fee for Intervention costs as standard under both Directors and Liability and Entity cover under ‘Investigation Cost Cover’. This is relatively new and not widely available under other Management liability policies.
What is Fee for Intervention?
This change in regulation puts a duty on the Health and Safety Executive to recover its costs for carrying out its investigation functions for those found to be in material breach of Health and Safety law. Prior to 2012 these costs were paid by the public purse.
This fee has currently been set at £124 per hour and will be based on the total time it takes the HSE to identify and conclude its work in relation to the material breach.
All associated work is included:
- writing notifications of contravention and reports;
- preparing and serving improvement or prohibition notices;
- follow-up work to ensure compliance (e.g. site visits, telephone calls, email correspondence, reviewing documentation provided);
- taking statements;
- specialist assistance (where specialist assistance is from HSL or a third party, those costs are recovered at the relevant rate applied by HSL or the third party);
- gathering information/evidence;
- assessing the findings and the documentation of inspection, investigation and enforcement conclusions;
- recording conclusions and inspection, investigation and enforcement information;
- reviewing investigations to ensure progress and appropriate lines of enquiry are followed; and
- research related to the material breach that is needed to carry out the tasks outlined above.
When is it payable?
The cost is only payable for companies or individuals where there has been a material breach which is defined as:-
A material breach is when, in the opinion of the HSE inspector, there is or has been a contravention of Health and Safety law that requires them to issue notice in writing of that opinion to the duty holder.
Payment is due to HSE within 30 days of the date of invoice.
Examples of FFI in practice
These examples are only indicative, to help illustrate the range of circumstances that might trigger FFI. They represent a range of issues an inspector may cover that can be divided into four areas:
- Health risks – where failure to comply might lead to exposure to harmful substances such as dust, fume and chemicals or energy such as noise or vibration;
- Safety risks – where the potential effects are immediate due to traumatic injury, e.g. contact with moving machinery, falls from height or contact with vehicles;
- Welfare breaches – requirements that are either part of the controls required for health risks, or are a basic right of people in a modern society;
- Management of health and safety risks – requirements related to capability to manage health and safety risks to a sustainable acceptable level
If the above scheme, product or article interests you, please mention this when contacting us. That way we can select the insurer/product mentioned, as we have a range of insurers that offer different benefits, for example not all of our insurers may cover the key elements mentioned above.
If you would like us to provide a quotation please complete one of the following:
- Complete the form on the Homepage
- Fill in the form on our contact us page
- Email us at email@example.com
- Call 01637 876 876
We do everything we possibly can to check that we have got our facts straight, but it’s always possible that we could make a mistake (hopefully not or never would be better). Therefore we would like to make you aware that we accept no responsibility for information that may be factually incorrect or out of date, but we will do our best to make sure that all content is accurate. Our vision behind bringing the blog to the wider community is to keep our clients and prospective clients informed of their legal requirements, the different products on offer and how they may benefit your business and the new schemes we find which we think will benefit you.
We are Personal and Commercial Insurance Brokers based in Newquay covering the whole of Cornwall including Newquay, Truro, Penzance, Liskeard, Redruth, Bodmin, St Austell & Helston.
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