In working on any project it is important to consider that the work may be going on in close proximity to other members of the community. Sometimes the work may carry risks, not only to the environment but also to the safety of others. Liabilities and the risks they present are considered in more detail here.
It is imperative that those organising and responsible for such work fully understand the legal and moral liabilities that might arise and how to deal with such issues.
Types of Liability
The primary device for dealing with liability is insurance. The insurance market breaks down liability into several categories in order to determine a cost for covering the risk of a liability actually occurring. The main categories of insurance cover are public liability, employer’s liability and contract works. Environmental regulations also need to be observed.
Public Liability: The need to protect the organisation doing the work from legal actions brought by members of the public at large if they suffer hurt or damage as a consequence of the failure of the organisation to provide adequate protection. There are regulations relating to working with special interest groups, particularly young people and children.
Employer's Liability: The need to protect the organisation from legal actions brought by members of staff. This often covers industrial injury claims arising from unsafe working practices. National employment legislation may also include volunteers.
Contract Works: The need to protect the value of work in the temporary construction phase before completion has taken place. The responsibility for this is often placed with the contractors carrying out the work, but this can be messy when many individual contractors are on site at the same time. A global cover for the works can make administration simpler.
Environmental Liability: The need to protect the environment from pollution resulting from activity on site. In Europe, the key piece of legislation is the Directive 2004/35/EC concerning the prevention and remedying of environmental damage.
More on liabilities and how to cover against them can be found in the Insurance section.
How to keep the costs down
Buying cheap insurance from an unreliable source is not a good policy. When it sells cover, an insurance company is, in effect, taking a professionally calculated gamble. If this is understood it can help to determine strategies that allow an organisation to buy insurance from reputable insurers at a reasonable cost. Attention to the following will help:
- First and foremost aim to deliver a project in a highly professional manner. Take responsibilities seriously and ensure a strict adherence to health and safety, preventing pollution and being a good employer. This requires good project management. It is common sense that if an insurance company representative sees poor work in an area that presents dangers to either the public or employees it will increase the sense of this being a ‘high-risk’ project and the cost of insurance premiums will go up as a result.
- Be consistent in the delivery of projects. There is nothing better than building a good track record with your insurers because it will give them confidence in your organisation’s abilities and thereby reduce their perception of risk. It follows from this that using a large number of different insurance companies is not a good idea. There has to be a balance struck between building a long-term relationship with a few choice providers and indulging in procurement by open competition across the entire market.
- Be open and honest in dealings with your insurers. This is again about building trust and reducing the perception of risk. If things do go wrong certainly take immediate, emergency action to professionally deal with the problem but communicate this as soon as possible to your insurers and then work out a strategy for a long-term resolution of the problem. Remember that they are professionals and know that things do sometimes go wrong – after all that is why they are there – and their confidence will be eroded if you try to cover up or make light of a problem.
Go to the next section - Health and safety
EU environmental liability
General insurance advice