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Management_Liability_InsuranceIf you are running a business, you will have made sure you are insured if anything happens to your employees, premises, equipment and stock. Losing any of these could have a major impact on the financial survival of your business.

What you may not have considered is a scenario where you could lose your own personal property or wealth. After all, your company is a limited company and therefore has limited liability so there is nothing to worry about. However, as a director of the company your liability is unlimited. If a claimant cannot get full compensation from your company, they are entitled to seek redress from the assets of its directors.

Directors and company owners often make decisions that entail an element of risk. If, because of a decision you have made, the company is sued for negligence or a wrongful act, claims can be made not only against the company but also against the company directors. This could have massive implications on your own wealth and lifestyle. Legal and investigative costs can run into hundreds of thousands of pounds and that’s before any compensation or fines are levied by the courts.

Management liability insurance
This insurance cover has been specifically developed for companies with a turnover of up to 50 million. It is taken out in addition to your usual commercial and property insurance and does not add very much in the way of premium to your standard insurance costs.

The cover includes directors’ and officers’ liability and company legal liability, employee dishonesty cover and legal pursuit.

You can also include pollution clean up costs and cyber-crime liability.

Access to employment, legal and regulatory advice is available with this policy to help you to manage a critical situation that could have devastating consequences for the company and its directors.

Why risk your own personal wealth now and in the future for a small additional cost?

Some of the decisions you make as a director now may not have an impact for years to come. You will still be liable for those decisions even if you have left the company. The last thing you want is to be caught up in a claim after you have gone.

This insurance cover is ideal for small to medium sized businesses that are just as vulnerable to this type of claim as larger corporations. It is often easier to reach and identify the owners of these companies.

Peace of mind is not easy to come by these days; for the price of a few sandwiches and drinks at your next board meeting, you could protect your company directors from claims on their personal wealth and the company from a devastating loss of funds.

To get a quote for your peace of mind, simply go to the contact page on our website and fill in your requirements and one of our team will contact you with more information about how management liability insurance works and the amount of cover you will need for your company.
If you or your business is found to be in material breach of health and safety law, you will have to pay for the time it takes the Health & Safety Executive (HSE) to identify the breach and help you put things right. This includes investigating and taking enforcement action and is called ‘Fee For Intervention’ (FFI).

HSE_Intervention_FeeIf it transpires that you have not broken the law, then you won’t pay anything. Dutyholders who comply with the law, or where there is no material breach, will not be charged FFI for any work that HSE does with them.

FFI applies to dutyholders where the HSE is the enforcing authority. This will include:
employers
  • self-employed who put others at risk
  • public and limited companies
  • general, limited and limited liability partnerships
  • Crown and public bodies
What the law says
The Health and Safety and Nuclear (Fees) Regulations 2016, link to external website say that a fee is payable to HSE if:
  • a person is contravening or has contravened health and safety laws; and
  • an inspector is of the opinion that the person is or has done so, and notifies the person in writing of that opinion.
What is a material breach?
A material breach is something which an inspector considers serious enough that they need to formally write to the business requiring action to be taken to deal with the material breach. If the inspector gives you a notification of contravention (NoC) after their visit, you’ll have to pay a fee.
The NoC must include:
  • the law that the inspector considers has been broken
  • the reason(s) for their opinion
  • notification that a fee is payable to HSE
Where an inspector simply gives you advice, either verbal or written, you won’t have to pay anything for this advice.

How much it costs
It currently costs £129 an hour. The fee will include the costs covering the time of the entire original visit. The total amount recovered will be based on the amount of time it takes HSE to identify the breach and help you put things right (including associated office work), multiplied by the hourly rate.
Your fee may include the inspector’s time:
  • at your business or workplace
  • preparing reports
  • getting specialist advice
  • talking to you after the visit
  • talking to your workers
The fee can vary depending on:
  • how long the original visit was
  • the time the inspector spent helping you put things right
  • the time it took the inspector to investigate your case
  • any time we spend on taking action against you
Find out more
The Guidance on the application of Fee for Intervention (FFI) document (also available in Welsh) sets out the general principles and approach of the scheme. It includes examples of material breaches but does not cover every scenario where FFI might apply.

Inspectors will apply this guidance and their enforcement decisions will be based on the principles of HSE’s enforcement decision-making frameworks – the Enforcement Management Model (EMM) and the Enforcement Policy Statement (EPS).

The Guidance on the application of Fee for Intervention (FFI) document (also available in Welsh) sets out the general principles and approach of the scheme. It includes examples of material breaches but does not cover every scenario where FFI might apply.

Some Management Liability or Directors and Officers insurance products provide cover to protect against FFI.

If you would like to discuss your own Management Liability Insurance or D&O policy then please contact us on 0121 321 4600 or send an email to info@clarisksolutions.co.uk
Health_and_SafetyTwo recent cases of accidents in the workplace resulting in court cases being brought against companies and directors by the Health and Safety Executive highlights the increased risks to employees in these sectors.

The cases below are just two examples of the many court cases and fines imposed on companies in breach of health and safety regulations.

The first case involved an HGV driver who suffered fatal injuries while coupling the HGV tractor unit to a trailer.

**Speaking after the case, HSE inspector Jessica Churchyard said “This tragic incident led to the avoidable death of a young man, and was caused in part by the failure of his employer to implement and monitor safe systems of work to prevent vehicle runaways.
“This death could have easily been prevented if his employer had acted to identify and manage the risks involved, and followed the industry guidance.”


The second case resulted in the amputation of a demolition worker’s left arm and right hand.

**HSE inspector Rohan Lye said after the hearing: “If the company and its director had taken basic steps to decide how to do this routine task, and what control measures to use, they could have prevented this devastating incident resulting in an employee suffering life-changing injuries.”

In the first case involving the HGV driver, the company was fined £170,000 and ordered to pay costs of £6,268.80.

In the second case, the company was fined £150,000 and ordered to pay costs of £9,523.04. In addition, the company director was sentenced to ten months imprisonment, suspended for two years and ordered to complete 200 hours of unpaid work.

Insured risk
In both cases the companies would have had to pick up the fines. Your Employers’ Liability insurance policy will generally (depending on your policy wording) cover you for:
  • Employee compensation
  • Employee and criminal proceedings defence costs
  • Court attendance compensation
Even if you have Directors and Officers insurance as well, neither will cover the cost of an HSE investigation or resulting fines or time in prison.

How to minimise your risk of prosecution
As the two quotes above from HSE inspectors imply, both incidents could have been prevented if the employer had implemented effective risk management and approved codes of practice.

To protect your business, you will need to manage your safety documentation, training records and risk assessments etc. Every business has most of this in place but very few can easily and quickly put their hands on it and rely on it being up to date.

Our partnership with health and safety specialists “Health and Safety Assist” can help you with this.
Their online portal is a secure resource and provides access to your own safety management hub. The portal will help you simplify and efficiently manage all of the documents necessary to meet your health and safety responsibilities and comply with the relevant standards for your business sector.

There are also a host of added benefits that you can exploit as the portal becomes more bespoke to your business. It could lead to reduced insurance premiums by demonstrating you have proper management of your workplace risks and compliance with health and safety legislation.

To find out more about how working with Health and Safety Assist can save you money, protect you from prosecution and a hefty fine or prison sentence, please contact one of our team.

**Contains public sector information licensed under the Open Government Licence v3.0
The supreme court has ruled that the Employment Tribunal fees paid by employees, if they want to take their employer to court, are illegal.

Employee-Tribunal-FeesHow will this affect your business?
Since the introduction of Employment Tribunal fees in 2013 there has been a 79% decrease in cases being brought. ACAS conciliation service think there will be a large increase the number of cases brought in future. Their records show that 2/3rds of the employees they advised did not proceed with their claim because they would have to pay tribunal fees.

Now these fees have been dropped, you may need to consider how to improve the management of employee relationships in future, to avoid a tribunal claim.

What can you do to protect your business from a claim?
Along with reviewing your HR procedures, you should also check insurance policies to see what sort of cover you have in case one of your employees brings an Employment Tribunal claim.

On your commercial insurance policy, you need to check that you have a Legal Expenses extension. This will cover you for all types of claims including unfair dismissal, discrimination and TUPE claims.
The Legal Expenses insurance will cover your defence costs and any settlements or awards made by the court.

Alternatively, if you have Directors and Officers insurance, this will cover defence costs if you are involved in court cases with employees as well as shareholders, regulators and other organisations.

Employment tribunals can be complicated and therefore time consuming and costly. Making sure you have adequate cover to defend your case will help to mitigate the risk of a costly court case to your business.

Employees in future will have nothing to lose by making a claim against their employer even if they only have a slim chance of winning.

To discuss the best options to protect your business, please call us on 0121 321 4600.
Last year the government scrapped the dividend tax rate and introduced a 7.5% basic tax credit and a £5,000 tax-free amount. These measures resulted in an increase in the tax take from the director/shareholders who pay themselves smaller salaries with a higher level of dividends.

Because of the higher dividends, this group represents the vast majority of individuals who would breach the £5,000 dividend tax allowance.

The cut to £2,000 of the dividend tax allowance seems to confirm a continued appetite by the chancellor to raise more revenue from the same group of individuals.

It means an increase in dividend taxation of up to £225, £975 and £1,143 for basic, higher and additional rate taxpayers respectively.

Extracting Profit
What, if anything, can the director/shareholder do? There are three main profit extraction methods: salary, dividends and pensions.

If the director/shareholder does not require the extracted profits for day-to-day living expenses, they should consider extracting these profits by way of an employer pension contribution, where it will still enjoy considerable tax advantages.

The employer pension contribution will usually be deductible as a legitimate business expense, reducing the company’s corporation tax bill.

The wealth will then pass to the individual without tax deduction or charge assuming the contribution is within the various annual allowances.

Taxable dividends are still more tax-efficient than taxable salary.

Directors and officers insurance
Directors-and-Officers-InsuranceChanging the way remuneration for directors is calculated is just one example of an event that could affect your income.

Though it may not be possible to insure against changes in government policy, you can protect yourself against other claims.

A D&O policy will typically cover; claims from shareholders against the management, employment tribunal costs, Health & Safety Executive enquiry costs, legal and defence costs and damages arising from employment practices and discrimination.

Why businesses need D&O Insurance
  • Increase in claims against directors.
  • Growing litigious society.
  • World has no boundaries - risks associated with the legislation and regulation in any country in which it operates.
  • Absence of risk management making them more susceptible to errors.
  • You could lose everything including homes, possessions and investments.
  • Legal Expense cover is not enough.
  • Disputes following Family Fallouts - Smaller firms may be in family ownership.
  • Regulators are getting tougher.
Can you afford not to take out? For the price of a few cups of coffee per week this additional insurance cover could save your family home.