Covered: Health & Safety Executive Fees for Intervention

The inclusion of cover that pays Health & Safety Executive Fees for Intervention (FFI) has attracted positive feedback following the relaunch of our commercial products in the Spring. Here’s some further information about FFI that’s aimed at helping agents explain what the new cover is and how enhances the value of the products. 

Background

• Fee for Intervention (FFI) is a “cost recovery scheme” operated by the Health & Safety Executive (HSE). Under the Health and Safety (Fees) Regulations 2012.    
• Under the Health and Safety (Fees) Regulations 2012, workplaces in ‘material breach’ of health and safety laws are liable for recovery of the HSE’s costs for any inspection, investigation and enforcement action that is undertaken. A ‘material breach’ occurs when the HSE issues a notification of contravention, an improvement or prohibition notice, or a prosecution.
• When criminal proceedings are started, FFI cease and criminal prosecution costs apply. (Note - prosecution costs are not covered by LEI, but the cost of legal representation is).
• From October 1, 2012, the HSE have been able to recover the costs of its interventions from businesses found to be in material breach of the law, even in the absence of a prosecution.
• If the HSE intervenes they are under a legal duty to recover costs in all cases where there is (i) a material breach of health and safety law and (ii) a requirement to rectify the breach is made in writing.
• There does not have to be an incident or prosecution to trigger such HSE involvement

Scope of FFI 

Sectors regulated by the HSE include: factories, mines, schools, fairgrounds, nursing homes, government premises, dentists and doctors’ surgeries. (Other occupations are regulated by  local authorities which do not operate a fee regime).

FFI applies to public and limited companies, partnerships, the Crown and public bodies, and to self-employed people.

It does not apply to:

• Self-employed people who only put themselves at risk
• Employees (Partners are not employees) 
• Work where another HSE fee is already payable (for some or all of that work), e.g. under the Control of Major Accident Hazards Regulations 1999

Other organisations that enforce health and safety law, such as the police or local authorities, will not be able to recover their costs under FFI.

FFI Charges 

Inspection with no action taken: No costs will be recovered
Inspection resulting in an email or letter: £750
Inspection resulting in a notice being issued: £1500

Full investigation: Ranges from approximately £750 through to several thousands of pounds.

HSE will invoice the business and expect payment within 30 days. A complaints process is available allowing businesses to bring a complaint about an invoice and HSE will explain the process when a charge is levied.

ARAG’s position

In our view, FFI are not fines and they have not been introduced as a civil penalty - but solely to support Government policy which requires that service users should pay for the costs of the services they use. HSE policy guidance makes it clear that the purpose of FFI is to recoup costs, and of course exposure to FFI may encourage good H & S practice. The law does not prohibit the use of insurance as a funding mechanism.

FFI could be considered similar to an order for opponents’ costs in a civil case, but the charges relate to internal admin, rather than legal costs incurred. Including indemnity for FFI for commercial policyholders completes a ring of protection by extending indemnity that has always been available for legal costs to appeal H & S enforcements notices, and to defend prosecutions.   

Since data has become available that allowed us to calculate the risk, we were pleased to add FFI cover as part of the May 2018 relaunch of commercial products. 

Notifying claims

We cannot settle FFI invoices until they have been raised, but policyholders should tell us about H & S activity as soon as they are aware that the H & S Exec has identified non-compliance that will incur FFI charges. We may also be dealing with a claim to appeal against an improvement or prohibition notice that relates to the intervention that has resulted in liability for FFI. If that is the case, customers should quote the reference of any claim that relates to the same event. FFI invoices should be sent to us promptly for payment.