Is it Covered?

18 April 2023 - Mark Wilby

A Building Contractor allowed people to sleep in a show flat at an unfinished apartment block within a construction site. No one was injured and nothing was damaged – so what is the issue?

After being tipped off about the situation, the limited company was investigated by the Health & Safety Executive (HSE). It was found that there were serious breaches of fire management at the site, creating a risk to workers and members of the public at the premises outside of business hours. The director of the business also regularly visited the site, but made no changes to mitigate the risks. The company was fined £600,000, and the director was fined £4,200, receiving 100 hours of community service1.

So, is it covered (by insurance)?

If there had been damage or even worse injuries to workers or the public, the Management Liability policy (MLP) cover would help to defend the client by activating the covers within, such as legal protection. However, fines and damages must still be paid by the business. With the subsequent damage to the companies’ and the directors’ reputations, this could potentially mean an end to the business.

The real issue here is not is it covered AFTER the event, but could it have been prevented BEFORE?

Businesses must appreciate their legal responsibilities… it is no one else’s responsibility and, with the UK’s regulatory landscape, this responsibility must be taken seriously. Businesses need to comply by having access to legal, employment and management information, as having an MLP policy could reduce damages and court costs. Yet getting the right advice beforehand can also have these types of risks, and the HSE may not have to get involved.

1 https://www.thefpa.co.uk/news/building-contractor-fined-600-000-for-repeated-fire-safety-failings

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