Irresponsible companies to face harsher penalties

Posted on April 02^nd 2008

The Corporate Manslaughter and Corporate Homicide Act 2004, which was passed by parliament last year, is to come in to affect from Sunday to ensure that companies face stiffer penalties should their irresponsibility cause death.

The new law is to ensure that companies that are guilty of a gross breach of their duty of care will make it easier to prove in a criminal court and stiffen fines. Judges will also be able to order bad publicity upon a company.

Larger companies had many failed prosecutions for manslaughter, as there are many delegated tasks. Senior Managers will now be held accountable for the organisation, should a death arise as they are held responsible for the way in which activities are managed.

The companies will also be fined approximately 5 percent of its average turnover over three years. The highest ever fine for one company was £15 million, this was only one percent of one year's turnover.

Unfortunately there is still the risk of a company being taken to court, even if they are innocent, and facing high costs.

The only way that they can protect themselves is by insuring that they are properly covered for legal costs and any appeal costs that maybe involved, for liability insurance, in particular employers, public and products liability and any vehicle insurance policies. Although they will not protect from paying any fines they will at least ensure that all insurance costs will be covered for defending the company.

Public and Employers Liability Insurance is available from Insuremyliability.co.uk. Compare and choose from a panel of the best commercial liability insurers in the UK

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