Setting up a new limited company is incredibly exciting. As a business owner, you can choose your own hours, be your own boss and dig your teeth into the projects that genuinely excite you. But with great power comes great responsibility – and as the owner of a limited company, you will also have some new health and safety obligations that you will be legally required to fulfil.
The Health and Safety at Work Act 1974
The primary piece of health and safety legislation you’ll need to be aware of as a limited company owner is the Health and Safety at Work Act 1974. This is a fairly broad piece of legislation which sets out a list of basic requirements that companies must fulfil.
Above all else, the Act mandates that all employers must protect the health, safety and welfare of all employees, casual workers or self-employed individuals, clients, visitors and member of the general public present on company premises.
The Health and Safety at Work Act 1974 applies to most businesses in the UK – even sole traders and most self-employed individuals. There are admittedly certain types of self-employment that are exempt from health and safety regulations, as long as the individual in question and their work activities do not pose any sort of potential risk to the public.
According to the UK Government’s Health and Safety Executive (HSE), exemptions are often made for novelists, journalists, graphic designers, accountants and financial advisors – but there is no hard and fast rule.
When in doubt and wherever possible, it makes sense to take for granted that your limited company will be required to comply with HSE safety laws. Not only does it demonstrate a commitment to best practice, but it shows your customers, clients and other members of the public that your company cares about its community and the individuals that inhabit it. More important still, it’s worth pointing out the UK’s workplace health and safety regime is in place to protect you and your company from harm. It is in everybody’s interest, including yours, to comply.Late filing penalties for limited companies
What does your limited company need to do to manage health and safety risks?
Fortunately, managing your limited company’s health and safety obligations and ensuring that you are compliant with existing legislation is fairly simple and affordable. It doesn’t even require a major time commitment. All you need to do is carry out a few recurring tasks, and the amount of time and energy you must devote to those tasks depends entirely upon the size of your business and what it is your business does.
To make sure your limited company is staying on top of its health and safety obligations, you’ve just got to follow these five easy tips.
1. Appoint a designated health and safety officer
One of the first steps any company owner should take to ensure their business is health and safety compliant is to appoint a designated team member to manage all of your company’s health and safety activities (which we’ll outline in just a minute).
If you run a small company that is a low-risk business in terms of health and safety, you’ll normally find that you can quite happily appoint an existing employee to take on these tasks without adding a whole lot to that person’s workload.
That being said, if your company is bigger, or the activities your company carries out are particularly high-risk – such as operating fairground attractions or planning large events – you may find that you need to hire a full-time member of staff with the correct skills, knowledge and experience to manage your company’s health and safety obligations.
If you’re unsure about how big an undertaking health and safety management could be for your limited company or the type of individual you should be appointing to mitigate those risks, the HSE can help to connect you with professional advice.
2. Create a health and safety policy
It’s all well and good appointing somebody to manage your limited company’s health and safety obligations – but what’s the point pretending to manage health and safety if you haven’t got a written policy?
Drafting a health and safety policy for your company is an incredibly important step in mitigating any potential risks. Not only will it keep your designated health and safety officer strategically focussed, but by sharing it with staff you will also be able to ensure that all your team members know about your commitment to health and safety. More importantly, they will know what is expected of them in terms of behaviour, processes and reporting potential risks or incidents.
Although the idea of writing a health and safety policy may sound quite daunting, the truth is your company’s policy doesn’t need to be long or complicated. All you really need is a short spreadsheet or document that details who is responsible for what activity, when it gets done and how it is completed.
If you need help writing a health and safety policy for your company, the HSE even has a range of examples and blank templates you can use for your business. Conveniently, some of the HSE’s health and safety policy templates even include a section for risk assessments – which we’ll get to next.
One point worth noting is that if you are bound to comply with the Health and Safety at Work Act 1974 but have less than five employees, you don’t technically need to write down your health and safety policy. That being said, it’s usually a whole lot easier to stay on top of your responsibilities if you write down your policy and store it somewhere it can be referenced at short notice.What are the filing requirements of a limited company?
3. Conduct a risk assessment
A crucial element of your company’s health and safety compliance will be to carry out a detailed workplace risk assessment.
A risk assessment is a comprehensive exercise in which your company must work to identify any potential risks to health and safety in your place of work, and then subsequently develop control measures you can implement to mitigate those identified risks. It’s worth pointing out that depending upon the types of risks you identify, your company may be bound to implement particular measures in line with legislation.
Yet, generally speaking, carrying out a risk assessment in your workplace can be quick, simple and virtually cost-free – and here’s how to do it.
The first step in conducting a risk assessment is to identify all hazards. You need to turn your premises upside down and think about what activities, processes or substances used could injure or harm employees, customers, or any other members of the public. A shortcut is to check all of the manufacturers’ instructions or data sheets for equipment and chemicals, look back through your company’s accident records to identify recurring themes and consider non-routine operations like maintenance or cleaning operations.
After you’ve identified potential risks and recorded them, you need to decide who might be harmed by those risks and how. Think how individuals could come into contact with risks and how they could be adversely affected. When carrying out this step, be sure to bear in mind that some workers may have particular requirements, and so they could subsequently be impacted by certain risks in a different way.
Then, it’s time to evaluate those risks and choose precautions your company can (and will) take to mitigate them. You are legally bound to do everything that is “reasonably practical” to mitigate risks for the purposes of promoting health and safety in the workplace, which means it is placed at your discretion to decide how much money, time or trouble you’re able to devote to mitigating identified risks.
You aren’t legally obligated to take actions that could be considered grossly disproportionate to the level of risk – but at the same time, you owe it to your employees, customers and members of the public to keep everyone out of harm’s way. For example, if you’ve got a dangerously sharp corner on-site, you don’t need to change vehicle routes. Yet by placing a mirror on the corner to help prevent accidents would be an affordable and reasonable step to mitigate a potential risk.
Another crucial point to bear in mind is that you are only going to be expected to include risks within your risk assessment that you as company owner could be reasonably expected to know about. You can’t be held liable for a lack of planning surrounding unforeseeable risks.
Above all else, it’s important that you get your team involved in the risk assessment so that they can voice their concerns and alert your attention to any hazards or potential risks they encounter – but you as company owner might not be aware of.
Next, be sure to record all your findings and proposed mitigation processes. Just like your limited company’s health and safety policy, if your business employs less than five people you are not legally required to write your risk assessment down. That being said, it’s incredibly useful to record your risk assessment, and it doesn’t need to take a lot of time.
Remember that your risk assessment should demonstrate that:
- You made proper checks where appropriate
- You have talked to those affected
- You have addressed all significant hazards
- You have taken reasonable precautions, and that the remaining risk is low
- You have involved your team members as part of your risk assessment
Again, the HSE has a risk assessment template you can populate to quickly create a comprehensive and organised risk assessment.
Finally, do not forget that a risk assessment will need to change as your business changes. New risks could emerge, and so you should set time aside to review your risk assessment records on a regular basis to ensure everything is up-to-date.What records do I need to keep for my limited company?
4. Train your staff
You’ve probably figured out at this point that involving staff is a crucial aspect of health and safety management. In addition to consulting your team on potential hazards, risks and how to mitigate them, your company must subsequently talk to and train staff on the precautions you have made. Every relevant employee must know how risks are controlled within the business and what information or training they need to stay safe and healthy.
That means you need to provide regular training sessions to make sure that all employees understand what is expected of them, and know how to identify hazards. Keep training records to ensure that all staff members have been trained, and you will know when it is time to refresh everyone with a new session.
As with the precautions you enact to mitigate hazards, government advice concerning training indicates as a company owner you will be expected to provide training that is proportionate to the level of risk. In many cases, providing a list of simple operation instructions is all you’ve got to do.
It’s important to note that health and safety training is supposed to take place during working hours, and as company owner you cannot charge your employees to undergo health and safety training. This must be provided by the company, regardless of whether you carry out training in-house or bring in an external agency.
If you’re not sure where to get started educating staff, the HSE provides training guidance.
5. Get insurance
If your limited company employs anyone that you are not related to, then you will need to take out employer’s liability insurance. This isn’t just a piece of friendly advice, either. You are legally obligated to do so, and so it is not optional.
That’s because it protects you if someone gets sick or injured while working for your company. In accordance with UK law, your employer’s liability insurance must cover your business for at least £5m, and it needs to come from an authorised insurer.
Only a few businesses are not required to have employers’ liability insurance. If you have no employees or are a family business and all employees are closely related to you, you may not need it – yet by and large, it’s a good product to have regardless of whether or not you’re legally obligated.
This is because if one of your employees gets injured or becomes ill as a result of the work they are carrying out for you, they can them claim compensation. That being said, as long as you have taken reasonable steps to prevent accidents or harm to your employees (and the injury or illness was caused after 1 October 2013), you should not have to pay any compensation. And if a court does find does find you are liable, employers’ liability insurance will then help you to pay any compensation due.
That makes employers’ liability insurance pretty useful to have in place.
If you’re employing people at your limited company and you are found to be trading without employer’s liability insurance, you can subsequently be fined up to £2,500 for each day that you are not properly insured. The UK Government can also fine you a further £1,000 if you choose not display your employer’s liability certificate, or if you refuse to make your insurance documents available to any inspectors if and when they ask to see those documents.
The bottom line
Health and safety management might sound like a complicated and expensive process, but the truth is that identifying and mitigating workplace hazards can be quick and affordable. It’s in your company’s best interest to ensure that everyone you work is kept safe and healthy at all times – and it is critical to your corporate image that your business is seen to do its part in protecting the community.
That’s why you owe it to your company to demonstrate best practice where health and safety is concerned, and once you get started it should quickly become second nature. By appointing a designated health and safety team member, drafting a policy, carrying out a risk assessment and conducting staff training, you should largely meet your company’s compliance obligations. Don’t forget to take out insurance, either.
But don’t forget: regulations are constantly changing, and the laws that apply to you and your business may vary based upon the type of work you’re carrying out and the sort of conditions you’re forced to operate in. That’s why you need to do your best to stay on top of all relevant legislation – and when in doubt, do not be afraid to seek professional advice.
Nothing is more important than preserving the health and safety of your customer, employees and other members of the public. By mitigating those risks, you’ll be able to stop worrying about potential hazards and start focusing on finding success for your limited company.
If you are looking for more information about running your limited company, it’s worth checking out our the 1st Formations Blog. There, you’ll find detailed information on company tax, marketing your business, funding tips and much more.