The actual and potential costs of “Health & Safety”
One of the less sensational announcements within the March Budget related to the government’s aim of cutting so-called ‘red tape’ and thereby helping small and medium-sized businesses to avoid unnecessary costs; a particular target being the dreaded “Health & Safety” regime, which is one of those subjects that fills lawyers’ hearts with glee and most other people with dread. Under the changes to health and safety regulations announced in the Budget, there will no longer be automatic health and safety inspections for all businesses. Instead they will focus only on “rogue employers” and high–risk sectors — such as construction — a step that is predicted to reduce the number of inspections by at least a third. Common sense would suggest that the retailing of petroleum spirit might also be considered to be a ‘high risk’ activity, as indeed could any retail business that involves serving members of the public face-to-face: working in a pub, for example.
Employer’s Health & Safety Policy
What may surprise some readers is that any business employing more than five staff must have a written Health & Safety Policy document, the purpose of which is to tell the staff about the employer’s commitment to their health and safety, and which should clearly say who does what, when and how, in relation to potential risks and actual events. Those Forecourt Traders who’ve worked [or still do-] on sites owned by the oil majors will be familiar with the massive lever-arch manuals issued, and occasionally up-dated, by someone in the “HR” department at head-office: the ones that tended to start with something pretty obvious [“Petrol can be a very dangerous, highly inflammable and poisonous substance…”] and in the next five hundred pages ran through every risk-scenario that the writers could dream up, stopping just short of all-out nuclear war, and telling you in detail how to cope with them. The intention being that even if you and everyone else on site suffered an excruciating death, at least nobody would be legally liable if all of the procedures had been followed.
That was all well and good in the days when your oil company owned the site, and had whole teams of people to originate and maintain this material; all you had to do was to make sure that when they sent you the occasional up-dated chapters you filed them in the right section of the manual, and that you regularly reminded all employees to read it. But what if you’re now both the ‘head-office’ and ‘HR Department’ rolled into one yourself? Sounds like another full-time job to add to your collection. The good news is that it doesn’t have to be very elaborate or difficult: in fact the government’s Health & Safety Executive [HSE] have produced a downloadable template, together with a specimen completed example, that you can use as the basis for your own written Policy document, which includes a section for the all-important ‘risk assessment’. The documentation is free, and available from the HSE website [http://www.hse.gov.uk/simple-health-safety/index.htm].
Employer’s Liability Insurance.
One topic related to Health & Safety is that of Employer’s Liability Insurance – the policy that virtually all employers must have in place, the one that you’ll be looking to for protection from the ambulance-chasing shysters [you’ll know them – especially if you ever watch the ad-breaks on daytime TV..] if ever any of your employees are unfortunate enough to suffer an accident at work or injury through work. Quite apart from the fact that you could be personally taken to the cleaners by someone who does, or used to, work for you if you don’t have this protection, it’s also illegal not to have such a policy [yes, there are very limited exemptions, but for most people they’re not worth bothering about] – and it must be with an insurer authorised by the Financial Services Authority [FSA]. The minimum cover required by law is currently £5m, although most reputable insurers now tend to offer at least £10m as their basic level of cover. The law also requires you to make the certificate of insurance clearly visible to all of your employees, and the certificate must state which businesses are covered, and the minimum level of cover.
An interesting and unusual facet of this insurance is that as far as any claims are concerned, the insurer cannot avoid paying out for them [if proven liable] simply on the basis that the employer has omitted to fulfil some responsibility on their own part. Now that may sound like the greatest get-out-of-jail-card you could ever receive, however there is a big “BUT” – while the insurance company may have to pay out to your employees, they are able to sue you subsequently to recover the full or partial cost of the claim if you’ve failed to comply with the relevant Health & Safety requirements. So you’re still expected fulfil your legal responsibilities – for example, you must carry out a risk assessment that is suitable and sufficient, and take all reasonably practicable measures to protect your employees and report incidents.
A few final points to remember about Employer’s Liability Insurance: traditionally you were required to keep even the expired certificates as proof of this insurance [and that really did mean ‘forever’] but that legal requirement was removed in 2008. However, employers are still strongly advised to keep a complete and permanent record of their employers’ liability insurance cover, because some industry- or occupation-linked diseases can appear decades after exposure to their cause, and former or current employees may decide to bring a claim against their employer for the period of exposure to the cause of their illness. In other words, it’s not just your current workers who might sue you, but someone who worked for you in the dim and distant past.
Failure to be insured can result in fines of up to £2,500 for any single day that you are uninsured, and failure to display a certificate of insurance, or to make one available for inspection by the HSE on request, can itself result in a fine of up to £1,000 per offence.
There’s a common perception that “Health & Safety” has to be cumbersome, restrictive and expensive; indeed that tends to be the case where you allow the “H&S Industry” to take over from common sense. However, if you go back to first principles – policy, risk assessment and insurance – then it need not be a huge burden, and may well protect you from far greater costs in the long run. So finish reading this issue of FT, then go and check your insurance certificate, and dust-off the safety manual to see whether you can replace it with something more relevant and easier to use in your own business.
