• NW Risk Solutions Team

Management liability - What should I be worried about?




As a company director or officer you probably spend enough nights losing sleep, worrying about the decisions that you’ve made. Management liability shouldn’t be one of the things that keeps you up at night. But we know ‘being forewarned is being forearmed’.


Here are some typical examples of claims you and your business could face to help you understand the situations that NW Risk Solutions help protect you from.



Regulatory

Directors and officers claim

Food Standards Agency

A customer goes to a takeaway and specifically asks for a dish without nuts. Because the takeaway place hadn’t tracked or controlled the ingredients, they didn’t realise that the standard ingredients had been switched for cheaper ones containing peanuts. The customer eats the dish and dies of anaphylactic shock. The owner of the takeaway business is prosecuted by the Food Standards Agency and charged with gross negligence manslaughter.


Health and Safety

Corporate legal liability claim

Corporate manslaughter

An employee was electrocuted after he came into contact with an overhead power cable. The company is prosecuted by the Health and Safety Executive (HSE).

The company can show that it gave the relevant training so it’s

cleared of corporate manslaughter. But the company is found

guilty of lesser charges and faces a fine as well as its own legal

costs.


Employee related

Employment practices liability claim

Redundancy

A struggling company makes some redundancies in an attempt to cut costs. One of the women made redundant takes the company to an employment tribunal. She claims that this is another example of the company discriminating against her because she’s a woman.


Financial

Directors and officers claim

Trading while insolvent

A company goes into insolvency. The suppliers sue the directors of the company for wrongful trading – continuing to trade knowing the company is insolvent and can’t meet its obligations. By doing so, the directors make the debt they owe to creditors worse.

The directors are ordered to contribute to the company’s assets

to make good the debt. They also have to pay their own defence

costs.