group news

The workplace faces new legal challenges with the introduction of the Corporate Manslaughter & Corporate Homicide Act, which is coupled with an increase in the number of gross negligence manslaughter prosecutions. The Act will come into force April 2008, across the UK.

The new law will have an impact on organisations, those who manage them and those who are employed or affected by the activities. The Act sets out a new offence for convicting an organisation where a gross failure in the way activities were managed or organised results in a person’s death. This will apply to a wide range of organisations across the public and private sectors.The new offence will be called corporate manslaughter - corporate homicide in Scotland.

Managing risks — not risk aversion

This is an opportunity for employers to think again about how risks are managed. The offence does not require organisations to comply with new regulatory standards. But organisations should ensure they are taking proper steps to meet current legal duties. The Act will mean that those who disregard the safety of others at work, with fatal consequences, are more vulnerable to very serious criminal charges

.However, the introduction of the new offence is an opportunity for employers to satisfy themselves that systems and processes for managing health and safety are adequate.

Just a week after the worst of the flooding in Yorkshire in June 2007, almost 7,000 businesses had submitted claims for an average of £100,000 of damage.

Soon, the problem for the UK insurance market was compounded when a similar and arguably more serious situation unfolded in Gloucestershire. Recent downpours in the north of England has seen the problem of flooding occur again for thousands of homeowners and businesses, many who have not yet recovered from the first disaster.

Not only were factories, shops, offices and warehouses hit by physical devastation which saw many towns and villages cut-off for a week or more, but the cost of business interruption in many cases was significant.

The deluge of rainfall that swamped Britain in the summer of 2007 is estimated to have led to payouts totalling £3 billion. A fear now, of course, is that this bill will have to be paid by the customers of insurance companies and will inevitably lead to higher premiums in the future.

But the flooding has still caused substantial costs, with the UK's largest insurer Aviva - best known for running Norwich Union - warning that it faced losses of £400 million as a result of flooding in June and July.

While there may well be an impact on premiums, our brokers at Creative Risk Solutions (www.creativerisksolutions.co.uk) believe it will not be significant and that, more importantly, the floods will lead to a number of positive outcomes.

Fierce lobbying from the insurance industry has, for example, now persuaded the Government to raise spending on flood defences to £800 million by 2011.

And German insurer Allianz has gone on the record saying the Biblical downpour should now act as an overdue "wake up call" for the industry to protect itself from the risk of flooding.

But what should you do and who should you turn to if you fear that your business may be at risk from a repeat of these terrible floods?

Simon Thomas, Director of Creative Risk Solutions encourages people to seek professional advice from their broker. “The industry does not rely on catch-all solutions, but is able to tailor individual insurance packages for every business and every situation."You should discuss the implications on your future insurance premium/excess directly with your insurer and/or broker while your local Environment Agency office should be able to tell you if there are any capital flood defence schemes planned for your area and on what timescale.".

If you do need to carry out physical improvements to your premises then it also essential to get advice from a specialist, who could undertake a comprehensive flood risk assessment and recommend an appropriate set of measures for the property”.