For many years, cyber-attacks have been company directors’ foremost concern when it comes to threats to their business – but not anymore.
After over 900 responses were garnered from company directors across 52 countries, a new concern came from left field and took first place: health and safety.*
The reason for the sudden shift in top spot is unclear, but it could have something to do with directors noticing the increase in fines and other penalties issued by the HSE (Health and Safety Executive) in 2023 to big corporations and smaller businesses alike.[1]
Let’s look at a few case studies that show the penalties care homes in particular have faced after breaching health and safety codes.
Care home directors fined £120,000 after breaching safety code
Two directors of an East Sussex care company called Care Pro were fined over £120,000 after it was found they were in breach of several fire safety regulations. In total, the directors were found to have breached twelve separate codes.
Directors of care home fined half a million after ignoring fire safety breach warnings
In 2020, Cardiff care home directors were fined nearly half a million pounds – payable within 12 months – after they were found to have persistently ignored, over several years, formal warnings that they were in breach of several fire safety regulations that could have resulted in a ‘large-scale tragedy.’
Care home manager fined £40,000 for negligence leading to two patient deaths
Care home manager Caroline Taylforth was fined £40,000 after it was found she failed to ‘provide safe care and treatment’ to two separate residents who died as a result of her negligence.
What’s particularly striking about the first two case studies is that while a tragedy had not yet arisen – as it had in the third example – the penalties received by the directors were still severe, showing that merely being in breach of health and safety rules can be enough to financially devastate your business.
The worrying new reality for care directors
Care homes and other domiciliary organisations face health and safety risks on the daily that most businesses simply aren’t exposed to, meaning that the health and safety concerns for directors will be amplified in this sector. Ailing patients, administration of medication, fire safety, food hygiene, handling of water, slips and trips…care homes are hotbeds for all these things and more.
Compounding this is the rapid rise of care homes that fail to meet an adequate standard of care. Between 2019 and 2022, the number of care homes specialising in dementia who received a rating of ‘inadequate’ more than quadrupled, from 2% to 9%.[2] What’s more, in recent years, over half of care homes have been rated as ‘inadequate’ or ‘requires improvement.’[3]
The rise in unsatisfactory care conditions places care directors at an increased risk of being taken to court for negligence – and that, in turn, means that the right protection is required.
But what sort of cover do you need? With mystifying abbreviations like ‘MLP’ and ‘D&O’, it can be difficult to know what’s what – and what’s best for you.
The important difference between MLP and D&O cover
A management liability policy (MLP) includes three separate forms of cover: directors’ and officers’ (D&O) liability, employment practices liability, and corporate legal liability. Think of it as an umbrella that provides good broad-spectrum coverage, but for those days that it’s not just raining but storming, you may need something a bit stronger – and that’s where D&O comes in.
While D&O is covered in MLP as standard, it’s nowhere near as comprehensive as you’ll need if you’re taken to court for any negligence claims, so you should always have a discussion with your broker about the benefits of having a standalone D&O policy.
Directors’ and officers’ insurance is about protecting the personal wealth of the director and other management staff from all the legal costs associated with defending against civil, criminal and regulatory claims or investigations.
MLP and D&O does not provide cover fines or penalties. It also excludes claims related to bodily injury, property damage, or deliberate acts of misconduct
Want to know more?
Towergate Insurance may be able to help; speak to a friendly specialist today at newcare@towergate.co.uk or 0330 123 5154. You can also find out more about us here.
Case study references:
Cardiff care home fined nearly half a million pounds – South Wales Fire and Rescue Service
Serious fire safety breaches see care home directors fined | Fire Protection Association
Towergate Insurance is a trading name of Advisory Insurance Brokers Limited, which is authorised and regulated by the Financial Conduct Authority (Firm Reference Number 313250). Registered in England and Wales, Company No. 4043759. Registered Address: 2 Minster Court, Mincing Lane, London, EC3R 7PD.
[1] HSE Annual Report and Accounts 2022/23 [2] Dementia patients in England facing ‘national crisis’ in care safety | Social care | The Guardian [3] More than half of care homes inspected are failing, says regulator – Disability News Service
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