Civil Engineering Reference
In-Depth Information
1.3.3 Legal reasons
Insured costs
Covering injury,
ill health, damage
The United Kingdom has, over time, developed a set
of rules and standards. These rules and standards
are refl ected in civil and criminal laws, which regulate,
among other things, our work activities.
In civil law, it has been established that employers
must take reasonable care of their employees. Failure to
meet these obligations can result in a claim for compen-
sation by the individual/s who have suffered a loss.
The criminal law places statutory duties on employ-
ers, responsible persons and others to ensure the health
and safety of employees and other persons who may be
affected by the work activities.
Legislative control over fi re safety matters in the
UK was rationalised in 2006 with the introduction of the
Regulatory Reform (Fire Safety) Order 2005. The Order
sets out in detail the roles and responsibilities of those
charged with managing fi re safety within organisations
(the 'responsible person') and that an assessment of fi re
risk has been undertaken. The order is enforced by local
fi re authorities (see section 1.4 below).
The Health and Safety at Work etc. Act 1974
(HSWA) together with the Management of Health and
Safety at Work Regulations 1999 require employers to
demonstrate that they have assessed and are managing
their risks to their employees and other persons who
could be affected by the work activity.
Failure to comply with any of the general safety or
fi re specifi c legislation can result in signifi cant fi nes for
companies and their managers, custodial sentences and
enforcement action by the enforcement authorities.
Product and material damage
Plans and building damage
Legal costs
Expenditure on emergency
supplies
Cleaning site
Production/service delays
and temporary labour
Investigation time
Supervisors' time diverted
Clerical effort
Fines
Loss of expertise/experience
Uninsured costs
Figure 1.4
Uninsured costs
causing losses in excess of £250 000. There are many
fi res falling outside the scope of the survey that result
in an organisation failing to recover, particularly those
relating to small to medium enterprises (SMEs).
These refl ect the costs to insurers (claims settle-
ment) but do not, however, take into account a wide
range of non-insurable costs. It is also often the case
in industry now that organisations underwrite their own
losses, particularly in relation to fi re and thus are respon-
sible for fi nding the fi nancial sums to cover claims and
losses which are often considerable amounts.
Regardless of whether people are injured or not,
there will be a fi nancial cost to organisations. The
Accident Prevention Advisory Unit (APAU) of the Health
and Safety Executive (HSE) has carried out extensive
research into the cost of accidents at work, the results
of which are summarised in the publication
The Cost of
Accidents at Work
(HS(G)96).
Some accident costs are obvious, e.g. compensa-
tion payments, property damage, damaged product,
sick pay, etc. These costs are referred to in HS(G)96 as
the direct costs.
The indirect costs of accidents are not so obvious,
e.g. replacement staff, investigation costs, poor publicity.
In addition, many of the direct and indirect costs are not
recoverable as insured losses.
The relationship between insured and uninsured
costs of accidents is highlighted in HS(G)96 where for
every £1 paid in insurance premiums, the average non-
recoverable costs were about 10 times the amount paid
in premiums. The losses from day-to-day accidents
range from 8 to 36 times the amount paid in premiums.
For most organisations, the cost of insurance
premiums can be compared to the tip of an iceberg with
the majority of the costs (uninsured and non-recoverable)
lurking beneath the water line.
1.3.4
The business case for managing fi re safety
The moral, economic and legal consequences of a fail-
ure in any safety system can have a signifi cant impact
upon a business. A serious fi re in a workplace that
results from inadequate management of fi re safety mat-
ters can begin a spiral of events that may result in total
business failure.
1.4
The legal framework for the
regulation of fi re and health and
safety
There are two main branches of law of interest to the
safety professional, civil and criminal.
Each has a bearing on the conduct of both employ-
ers and employees while carrying out their work activ-
ities. Table 1.1 provides a comparison of some signifi -
cant aspects of both branches of law and the following
paragraphs discuss the key aspects in more detail.
