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Wednesday 22 June 2011
Friday 10 June 2011
Fleet Management - What is your duty of care?
Introduction
Regardless of how many vehicles you operate there are a number of pieces of legislation that govern road safety, including the various road traffic acts and regulations supported by the Highway Code. In addition there are a number of related statutes that are intended to safeguard road-users, these include regulations covering the construction and use of vehicles, special health and safety legislation, regulations covering the carriage of dangerous goods by road.
The main responsibilities imposed by this legal framework, falls on the shoulders of road users and vehicle owners.
It is important to note that the vehicle is considered to be a place of work.
The main responsibilities under the road traffic acts are towards the driver of the vehicle. He is responsible for driving a safe vehicle, adequately maintained and insured, in a safe manner having due regard to other road users and pedestrians. The employer has a duty towards providing a safe vehicle and insurance if the vehicle is owned by the employer.
Under employment law the employer has a duty towards the employee and members of the public who may be affected by his work activities. The employer is also "vicariously liable" for the acts of his employees. The employee has a duty to comply with legislation etc.
Because of his status as an employer, an employer is liable for the injuries or death negligently caused by one employee to another, or to a worker from another company on his premises or to a member of the public injured by his employee.
Where the employee drives recklessly or breaks speed limits it is the drivers' responsibility. Where speeding was due to inappropriate scheduling of appointments by the employer, liability could be joint, i.e. they could both be prosecuted.
As previously mentioned, employers have a responsibility to manage Health & Safety. There need to be policies, procedures and ‘safe systems of work' in place that reduce work related risks, including the on-the-road activities of employees, so it is vital that risks arising from the fleet of motor vehicles are properly managed.
Risk management is all about common sense. You look at what might happen, assess the impact of potentially damaging events and take steps to prevent the worst from arising. Managing a fleet of vehicles is no different.
When vehicles are being used or driven on the highway by persons working for an employer under a contract of employment, the employer has duties of care, which are responsibilities under the Health & Safety at Work Act 1974 and also they have a common law duty of care. This means that under this ‘duty of care' an employer must take reasonable care to protect employees from the risk of foreseeable injury, disease or death whilst they are at work.
Key Action Points
•Carry out a Risk Assessment
•Produce a Health and Safety Policy, which includes your procedures to manage driver safety
•Ensure all licences are checked at least annually
•Regularly record maintenance and servicing details
•Record all training that has been completed
Ensure that all of the above measures include any private vehicles and drivers used on or in connection with the company's business activities
There are three key areas for risk management that you need to give attention to:
Driver
•Driver vetting and selection
•Induction procedures
•Licence checks
•Accident reporting procedures
Vehicle
•Vehicle suitability
•Vehicle maintenance and inspections
•Vehicle security
Journey
•Journey planning
•Managing driver fatigue
•Speed management
•Journey type
The Health and Safety Executive (HSE) have published guidance for employees on managing occupational road risk.
Persons found guilty of breaches of road traffic law can be subject to a wide range of penalties including prison for serious offences. Breaches of Health & Safety Law may result in fines or imprisonment.
Directors may be liable if it can be shown that their negligence contributed directly to an injury.
Corporate Killing
A criminal offence of corporate manslaughter has now been introduced, making it easier to prosecute companies responsible for fatal accidents.
The offence will apply when someone has been killed because senior management "grossly fails to take reasonable care for the safety of employees or others".
The maximum penalty will be an unlimited fine, as well as compulsory ‘Publicity Orders' a process in which the guilty company will be directed by the courts to publicise their shortcomings, highlighting to all the extent to which they were guilty of neglect. This could be catastrophic to business reputation and moral.
The employer responsibility also extends to ensuring that private vehicles used by employees on "Company Business" are also operated in a lawful manner. Checks by the employer should include the vehicles mechanical fitness i.e. MOT test (if over 3 years old for cars), services and maintenance records and regular vehicle condition reports.
They must ensure that the driver has "business use" insurance cover and that the driver is suitably licenced to drive that vehicle.
References
The Highway Code
The Health and Safety Executive (HSE)
Health and Safety at work etc Act 1974
The Stationery Office 1974 ISBN 0 10 543774 3
The Management of Health and Safety at Work Regulations 1999
The Stationery Office ISBN 0 11 085625 2
Regardless of how many vehicles you operate there are a number of pieces of legislation that govern road safety, including the various road traffic acts and regulations supported by the Highway Code. In addition there are a number of related statutes that are intended to safeguard road-users, these include regulations covering the construction and use of vehicles, special health and safety legislation, regulations covering the carriage of dangerous goods by road.
The main responsibilities imposed by this legal framework, falls on the shoulders of road users and vehicle owners.
It is important to note that the vehicle is considered to be a place of work.
The main responsibilities under the road traffic acts are towards the driver of the vehicle. He is responsible for driving a safe vehicle, adequately maintained and insured, in a safe manner having due regard to other road users and pedestrians. The employer has a duty towards providing a safe vehicle and insurance if the vehicle is owned by the employer.
Under employment law the employer has a duty towards the employee and members of the public who may be affected by his work activities. The employer is also "vicariously liable" for the acts of his employees. The employee has a duty to comply with legislation etc.
Because of his status as an employer, an employer is liable for the injuries or death negligently caused by one employee to another, or to a worker from another company on his premises or to a member of the public injured by his employee.
Where the employee drives recklessly or breaks speed limits it is the drivers' responsibility. Where speeding was due to inappropriate scheduling of appointments by the employer, liability could be joint, i.e. they could both be prosecuted.
As previously mentioned, employers have a responsibility to manage Health & Safety. There need to be policies, procedures and ‘safe systems of work' in place that reduce work related risks, including the on-the-road activities of employees, so it is vital that risks arising from the fleet of motor vehicles are properly managed.
Risk management is all about common sense. You look at what might happen, assess the impact of potentially damaging events and take steps to prevent the worst from arising. Managing a fleet of vehicles is no different.
When vehicles are being used or driven on the highway by persons working for an employer under a contract of employment, the employer has duties of care, which are responsibilities under the Health & Safety at Work Act 1974 and also they have a common law duty of care. This means that under this ‘duty of care' an employer must take reasonable care to protect employees from the risk of foreseeable injury, disease or death whilst they are at work.
Key Action Points
•Carry out a Risk Assessment
•Produce a Health and Safety Policy, which includes your procedures to manage driver safety
•Ensure all licences are checked at least annually
•Regularly record maintenance and servicing details
•Record all training that has been completed
Ensure that all of the above measures include any private vehicles and drivers used on or in connection with the company's business activities
There are three key areas for risk management that you need to give attention to:
Driver
•Driver vetting and selection
•Induction procedures
•Licence checks
•Accident reporting procedures
Vehicle
•Vehicle suitability
•Vehicle maintenance and inspections
•Vehicle security
Journey
•Journey planning
•Managing driver fatigue
•Speed management
•Journey type
The Health and Safety Executive (HSE) have published guidance for employees on managing occupational road risk.
Persons found guilty of breaches of road traffic law can be subject to a wide range of penalties including prison for serious offences. Breaches of Health & Safety Law may result in fines or imprisonment.
Directors may be liable if it can be shown that their negligence contributed directly to an injury.
Corporate Killing
A criminal offence of corporate manslaughter has now been introduced, making it easier to prosecute companies responsible for fatal accidents.
The offence will apply when someone has been killed because senior management "grossly fails to take reasonable care for the safety of employees or others".
The maximum penalty will be an unlimited fine, as well as compulsory ‘Publicity Orders' a process in which the guilty company will be directed by the courts to publicise their shortcomings, highlighting to all the extent to which they were guilty of neglect. This could be catastrophic to business reputation and moral.
The employer responsibility also extends to ensuring that private vehicles used by employees on "Company Business" are also operated in a lawful manner. Checks by the employer should include the vehicles mechanical fitness i.e. MOT test (if over 3 years old for cars), services and maintenance records and regular vehicle condition reports.
They must ensure that the driver has "business use" insurance cover and that the driver is suitably licenced to drive that vehicle.
References
The Highway Code
The Health and Safety Executive (HSE)
Health and Safety at work etc Act 1974
The Stationery Office 1974 ISBN 0 10 543774 3
The Management of Health and Safety at Work Regulations 1999
The Stationery Office ISBN 0 11 085625 2
Directors & Officers Liability Insurance
What is Directors and Officers Liability Insurance?
Directors and Officers Liability Insurance cover protects companies’ directors, officers and senior managers against claims arising from their decisions and actions taken whilst managing their business.
What are a Director’s Responsibilities?
The duties of a director have been established through statutes, regulations and case law in the following areas:
Duty of Care and Skill
This is a common law duty requiring Directors to act with ‘the care an ordinary man would take in the same circumstances on his own behalf’ and with the skill expected from someone with his ‘particular knowledge and experience’. Where duties are delegated the Director must ensure that the person to whom the duties are delegated is sufficiently experienced/reliable/honest.
Fiduciary Duty
Directors must act honestly, in good faith and in the best interest of the company and must ensure that he does not have any conflict of interest.
Statutory Duty
There are many statutes that affect the conduct of Directors and Officers including the Companies Act 1985, Insolvency Act 1986, Financial Services Act 1986, Environmental Protection Act 1990, Health and Safety at Work Act 1974, to name but a few.
How Can Claims Arise?
If a Director is perceived to have failed in any of his duties then a claim could come from any one of a number of third parties including:
Creditors
Liquidators
Government and Regulatory bodies
Customers/Suppliers
Employees
Auditors
Why Buy Directors and Officers Liability Insurance?
In a claim situation the Director’s personal assets are at risk. Directors cannot rely on the company indemnifying them. Often such an indemnity from the company will be in contravention of the Companies Act. Regardless of the stipulations of the Companies Act in the event of insolvency there will be no prospect of the company indemnifying the Directors and Officers.
The Directors and Officers Liability Insurance Policy will pay on behalf of the Director his legal costs and expenses and any civil damages awarded against him.
Typical Claims Scenarios
Liquidation – Following bankruptcy the Directors are accused of wrongful trading by the Department of Trade and Industry.
Environmental – Following spillage of a pollutant proceedings are brought by the Environment Agency against the Directors.
Health and Safety – Following a fatal accident involving breaches of Health and Safety procedures, the Managing Director is identified as being the ‘Controlling mind and will’ of the Company, and is therefore prosecuted for Corporate Manslaughter.
Employment Practices – An employee takes action against a supervisor for harassment and discrimination.
Actual Claims
1) A manufacturer’s cooling systems became contaminated resulting in several employees contracting Legionnaires disease. The MD was accused of negligently failing to implement the correct maintenance procedures and prosecuted for Corporate Manslaughter. The director's legal costs amounted to several hundred thousand £s which were paid by the D&O policy.
2) Following the insolvency of a furniture company charges were brought against two directors alleging Wrongful Trading. Although charges were ultimately dropped substantial legal defence costs had already been incurred and paid for by the D&O policy.
The Changing Environment
Some Points to Consider:
• Regulation is increasing
• There is a greater awareness on the part of third parties of the duties and responsibilities of a Director
• Shareholders and other third parties are becoming more aware of their rights
• Lawyers are now able to act on behalf of plaintiffs on a no win no fee basis.
Directors and Officers Liability Insurance cover protects companies’ directors, officers and senior managers against claims arising from their decisions and actions taken whilst managing their business.
What are a Director’s Responsibilities?
The duties of a director have been established through statutes, regulations and case law in the following areas:
Duty of Care and Skill
This is a common law duty requiring Directors to act with ‘the care an ordinary man would take in the same circumstances on his own behalf’ and with the skill expected from someone with his ‘particular knowledge and experience’. Where duties are delegated the Director must ensure that the person to whom the duties are delegated is sufficiently experienced/reliable/honest.
Fiduciary Duty
Directors must act honestly, in good faith and in the best interest of the company and must ensure that he does not have any conflict of interest.
Statutory Duty
There are many statutes that affect the conduct of Directors and Officers including the Companies Act 1985, Insolvency Act 1986, Financial Services Act 1986, Environmental Protection Act 1990, Health and Safety at Work Act 1974, to name but a few.
How Can Claims Arise?
If a Director is perceived to have failed in any of his duties then a claim could come from any one of a number of third parties including:
Creditors
Liquidators
Government and Regulatory bodies
Customers/Suppliers
Employees
Auditors
Why Buy Directors and Officers Liability Insurance?
In a claim situation the Director’s personal assets are at risk. Directors cannot rely on the company indemnifying them. Often such an indemnity from the company will be in contravention of the Companies Act. Regardless of the stipulations of the Companies Act in the event of insolvency there will be no prospect of the company indemnifying the Directors and Officers.
The Directors and Officers Liability Insurance Policy will pay on behalf of the Director his legal costs and expenses and any civil damages awarded against him.
Typical Claims Scenarios
Liquidation – Following bankruptcy the Directors are accused of wrongful trading by the Department of Trade and Industry.
Environmental – Following spillage of a pollutant proceedings are brought by the Environment Agency against the Directors.
Health and Safety – Following a fatal accident involving breaches of Health and Safety procedures, the Managing Director is identified as being the ‘Controlling mind and will’ of the Company, and is therefore prosecuted for Corporate Manslaughter.
Employment Practices – An employee takes action against a supervisor for harassment and discrimination.
Actual Claims
1) A manufacturer’s cooling systems became contaminated resulting in several employees contracting Legionnaires disease. The MD was accused of negligently failing to implement the correct maintenance procedures and prosecuted for Corporate Manslaughter. The director's legal costs amounted to several hundred thousand £s which were paid by the D&O policy.
2) Following the insolvency of a furniture company charges were brought against two directors alleging Wrongful Trading. Although charges were ultimately dropped substantial legal defence costs had already been incurred and paid for by the D&O policy.
The Changing Environment
Some Points to Consider:
• Regulation is increasing
• There is a greater awareness on the part of third parties of the duties and responsibilities of a Director
• Shareholders and other third parties are becoming more aware of their rights
• Lawyers are now able to act on behalf of plaintiffs on a no win no fee basis.
Thursday 2 June 2011
Our Service Promise
What will you gain from my free insurance review?
A free review of your business insurances from me brings with it several advantages.
My area of expertise is in arranging bespoke insurance cover for companies with a turnover of between £1M and £100M in a wide range of industries and professions but more specifically in the High Risk Liability sector such as roofing, scaffolding, waste management, the security industry, haulage, and also in the leisure industry.
• I will personally visit you and carry out a free review of your current insurance
• Together we will identify the risks affecting you, your team and your business
• I will personally create a programme of covers which will meet your specific needs
• Together we will continue to monitor your needs as your business evolves
• I will provide you with a single point of contact and continuous support in the event of a claim
As businesses grow and evolve their insurance needs change over time but there insurances don’t evolve to keep pace with them. Consequently, whenever I visit a client I frequently find that their sums insured are inadequate to cover their level of machinery and stock, they aren’t covered for the type of work they are now involved and they are frequently unaware of their obligations under the policy. (For example, there is no point having Flood cover if the policy has a stillage warranty and your stock isn’t kept 6 inches off the ground).
So what does all this mean for you?:
• Improved cover at similar or reduced cost
• Cover in unusual or difficult situations
• Confidence that there are no gaps in cover
• No "quick wins", but long term savings
• Ability to handle health and safety and other regulations
• Imaginative thinking leading to new solutions
• An open relationship - a partner rather than just a supplier
• Access to first class insurers to share the risk
David Wilson, the Business Insurance Expert – Protecting people, property & livelihoods by giving right advice, at the right time, providing peace of mind.
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