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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.
Thursday, 19 May 2011
Quakes and Floods
Quakes & Floods to Affect Premiums
Recent months have seen a spate of natural disasters with the insurance market, Lloyds of London, being heavily involved in the aftermath. Lloyds estimates that its insurance market faces claims totalling $3.8 Billion (£2.33 Billion):
Estimated Claims
Incident Lloyds of London Estimated Claims Insurance Industry GloballyJapanese Earthquake & Tsunami $1.95 Billion (£1.2 Billion) $30 Billion
New Zealand Earthquake $1.2 Billion (£750 Million) $9 Billion
Australian Flooding $650 Million (£400 Million) $5 Billion
Richard Ward, the Chief Executive of Lloyds of London, said “The beginning of 2011 has seen a major impact on communities in Australia, New Zealand and Japan. As ever, our priority remains to assess and settle valid claims as swiftly as we can to help these communities get back on their feet.”
“The Lloyd’s market is as well capitalised as it has ever been and, while claims from all three events could still evolve over time, the market’s total exposure is well within the worst-case scenarios.” He added: “We expect to see a firming of rates as a result of this first quarter and the recent tornadoes in the United States”.
“The Lloyd’s market is as well capitalised as it has ever been and, while claims from all three events could still evolve over time, the market’s total exposure is well within the worst-case scenarios.” He added: “We expect to see a firming of rates as a result of this first quarter and the recent tornadoes in the United States”.
When insurers underwrite a book of business they make a judgement as to how much of the risk they can take themselves. They then off-set the remainder of the risk by taking out re-insurance from re-insurers such as Munich Re and Swiss Re. (Without Reinsurance, the major “high street” insurers would not be able to insure as many risks as they do at present with a corresponding increase in premium rates, more stringent policy terms and a shortage of insurance availability). With regard to the Earthquake and Tsunami in Japan, most of the losses will be met by Japanese insurers. Only 40% of these losses have been reinsured by the Japanese insurers which means that they will be footing the bill for 60% of the insurance claims while the remaining 40% will ultimately be met by reinsurers. Major reinsurers, such as Swiss Re and Munich Re took the lions share of the reinsurance risk from Japan. As a result Munich Re has suffered a $2.1Billion hit from the Japanese earthquake, which is reportedly larger than the company’s entire natural disaster budget, and Swiss Re has estimated claims at $1.2 Billion.
Since the beginning of this year, global bill for natural catastrophe losses have topped $50 Billion. This, combined with the continuing low return on investments will inevitably create an upward pressure on insurance rates generally.
Major insurers such as Hiscox and Munich Re (the World’s largest re-insurer) have warned of large price increases as early as this Summer, with Hiscox predicting rises of 10% in the US catastrophe market.
The after effects off the recent natural disasters are still being felt in the global financial markets and will be visiting a premium near you in the not too distant future. Take a look at your insurance arrangements in good time before your renewal date and consult an insurance broker to review the market so that you can be sure you have the most appropriate cover and the best deal available from the market.
If you would like to discuss any of the features covered in this article then please call me, David Wilson, on 07970 304169 or email me on david@nevillejones.com
David Wilson - The Business Insurance Expert.
Protecting people property & livelihoods
by giving right advice, at the right time, providing peace of mind.
David Wilson - The Business Insurance Expert.
Protecting people property & livelihoods
by giving right advice, at the right time, providing peace of mind.
Thursday, 12 May 2011
Employer Reference Number
Employer reference number
Why do I now need these when taking out Employers Liability Insurance and where can I find it?
What is an Employer Reference Number?
An ERN is given to every business that registers with HM Revenue and Customs as an employer. It is a unique set of letters and numbers used by the taxman and others to identify your firm. It is often referred to on tax forms as an employer PAYE reference.
This reference is made up of two parts: a three-digit HMRC office number, and a reference number unique to your business. It will be provided to you in your employer’s welcome pack when you register with HM Revenue and Customs, and will also appear on a range of correspondence from HRMC.
Employers registered with HM Revenue and Customs will receive a range of details and reference numbers. Many of these can be confusing, and some get lost. But the employer reference number (ERN), also known as an employer PAYE reference, is a vital piece of information that you must hold onto.
When do I need an ERN?
Your ERN will be required in a number of different circumstances. Perhaps most importantly, you will need this number when you come to complete your end-of-year PAYE return. An invalid or missing ERN is amongst the most common reasons for the rejection of end-of-year returns; you will need to know this number in order to fulfil your statutory reporting obligations.
It is also likely that you will be asked for your ERN by an employee at some point. Employees often need their employer’s reference number when applying for tax credits, applying for Student Loans, and a range of other tasks. You may also be required to include it on payslips.
As a result of impending legislative changes, you will also now need to declare your ERN when purchasing Employers Liability Insurance. This is required to identify at which firms an employee has worked in the event of a claim significantly after the event – for example in the case of claims for asbestosis.
The Employers’ Liability Tracing Office (ELTO) is an independent industry body comprising members who are Employers Liability (EL) insurers.
The ELTO is an independent industry body comprising members who are Employers Liability (EL) insurers. It is a proactive move by the insurance industry to meet its obligations to help those who have suffered injury or disease in the workplace identify the relevant insurer quickly and efficiently. At the heart of this process is a centralised database – the Employers’ Liability Database (ELD) – which will contain all new and renewed EL insurance policies, old EL policies that have new claims made against them and all successful traces from the current Tracing Service. ELTO’s members will be required to supply policy data to the ELD on all new and renewed EL policies from 1 April 2011. The ELD will be accessible for claimant searches from this data via www.elto.org.uk and will be used to trace EL policies.
Why is there a requirement for the ERN (Employer PAYE reference)?
The ELD’s ability to provide enquirers with successful trace results will be supported by establishing a unique identifier for each employer on the database. ELTO has adopted the Employer Reference Number (ERN) as the most effective unique identifier available. This is also commonly referred to as ‘Employer PAYE Reference’. Members will be required to supply the ERN to the ELD.
On the Motor Insurance Database (MID), the vehicle registration number is the unique identifier that enables searches to identify the appropriate data record. The ERN will perform a similar function on ELD.
Do all companies have an ERN (Employer PAYE reference), if not who is exempt?
UK businesses employing one or more people are required to have the ERN, which is the reference number for their employees’ income tax and national insurance contributions. A tiny minority of employers do not have an ERN.
The only exemption is where the employer pays all their employees below the PAYE threshold (£503.00 monthly).
What are the timescales for getting the ERN (Employer PAYE reference) loaded onto the database?
From April 2012, ELTO members will be required to supply all subsidiary names as well as the Employer Reference Number (ERN) for the policyholder and all subsidiaries for all new and renewed policies. In preparation for this, members will begin to collect this information from April 2011.
Will brokers be able to use ELTO to trace policies for their insurers?
The purpose of ELTO is to provide claimants with information to help them trace an EL insurer. However, as with the current tracing service, brokers will also be able to use the service where their insurer is facing a specific claim and they need to identify their former insurer.
What if I have lost my ERN?
It is important that you keep hold of you ERN, as you will need it regularly throughout the tax year. If you have lost the number, you will be able to find it on correspondence from HMRC relating to PAYE. It will also appear on any P45s or P60s for previous or current employees of which you have copies.
If you do not have any record of your ERN it may be that you are not registered as an employer. If this is the case, but you are employing or intend to employ someone, it is vital that you register as a matter of urgency.
If you would like any further advice regarding your Employers Reference Number or indeed any aspect of your liability or business insurance requirements, for a free review contact David Wilson on 01244 520844 or 07970 304169. (Email: david@nevillejones.com)
Tuesday, 22 March 2011
Theft of Heating Oil
The cost of heating oil has increased significantly recently, resulting in more thefts of oil from both domestic and commercial properties.
What you can do to prevent losses?
Monitor the level of oil in your tank regularly.
course of action, as thieves may smash the valve
completely, but it can deter a less determined thief.
Conceal the location of the tank by using hedging,
fencing or walling.
Ensure any gates are locked at night, to make it more
difficult for a thief to escape with oil.
Securely lock doors at all times if the tank is situated
within a building.
Install an alarm device which creates an alert if the oil
level suddenly drops or if the lock is attacked.
Consider installing security lighting to cover the tank,
if it is overlooked by nearby buildings.
Consider closed circuit television.
Ask nearby residents to be vigilant and report any
suspicious activity to the police.
Contact your Insurance Broker for further advice.
For further advice relating to this article or any other aspect of your business insurance requirements please contact David Wilson ACII on 07970 304169 or david@nevillejones.com for a free, no obligation consultation.
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