Construction Site Tragedy Highlights Need for Directors & Officers Insurance Cover

The need for construction-sector directors and managers to be able to mount a defence in court and protect their personal assets, as well as their business’s bottom-line, should a health and safety breach occur, has been highlighted through a recent case.

Both a company director and a project manager have found themselves with suspended custodial prison sentences and court costs of £20,000 and £5,000 to pay respectively, following a 2016 incident that saw an untrained and unsupervised worker killed whilst operating a forward-tipping dumper truck.[1]

The management of the construction site in question was said to be poor, with no designated traffic routes.  Despite having not had the required training, the worker was alone at the time of his death and not wearing a seat belt.  He was not found for two days and the access ramp the truck had been reliant upon was found to be dangerous, with loose ground and a cross slope that exceeded the dumper truck’s machine operating capacities.
With such inadequate health and safety, the custodial sentences of 21 weeks, suspended for 12 months, for the project manager and 32 weeks, suspended for 12 months, for the director, were not surprising.

The construction-sector case highlights the fact that the law believes there is a duty of care to employees, contractors and others working on a business’s behalf, which is not just to be exercised by the company, but also by the directors and officers who own it and who are responsible for key parts of the day-to-day operations.  Any line manager, who allows a breach of health and safety to occur, can be deemed responsible for whatever occurs as a result of the breach.

For this reason, directors and officers are strongly advised to protect their own assets through insurance.  This can be done through a management liability or Directors & Officers insurance policy, which will recompense them for any court costs and enable them to afford the required legal counsel to defend their case.

Such insurance is becoming increasingly important at the present time, with experts predicting an increase in litigation, as a result of the pressures brought about through Covid-19[2] and the need for businesses to try to keep working on through the pandemic.  Interpreting whether an instruction to attend work put an employee at risk is just one grey area that could be the source of future claims, but there are many more.

To find out more about D&O insurance, you can talk through your situation with a trained broker, who will be able to offer you guidance and assess whether such cover is relevant for your needs.  A broker can also assess who in your organisation might be most exposed, should future claims arise.  We have construction industry experts within our network, so you can be assured that our broker will understand your world.
To start the process, please just get in touch.