September 2026 has been an unusually heavy month for Health and Safety Executive enforcement in construction. On 9 September, Appledorn Developments and T Vaughan Limited were fined £500,000 and £650,000 respectively after the death of Gheorghita Arsene in a trench collapse at Banstead in 2020. T Vaughan was also ordered to pay £40,000 in costs, taking the wider financial penalty close to £1.2 million.
Mr Arsene’s death was described by the HSE as preventable. The trench had no supports and excavated soil had been placed immediately beside it, despite the well-known risks associated with excavation work. The company’s contracts manager, Anthony O’Connor, also received a suspended custodial sentence and unpaid work order.
That was not an isolated enforcement action. A roofing boss in St Cyrus was fined £15,000 after a worker fell to his death, while Hillbeck Homes was fined £300,000 plus £9,284.05 in costs after Joseph Tuck, a temporary labourer in only his second week, fell through an unprotected stairwell opening and suffered serious spinal injuries.
The important insurance point is often missed when cases like these make the news. A serious incident creates several separate financial consequences, and they do not move together. The criminal fine, the civil compensation claim, the cost of defending the business and the effect on future insurance and tenders are different issues.
For contractors reviewing their Construction Contractor Insurance, these are the five points that matter.
1. The criminal fine is not insured
There is no insurance policy that transfers an HSE criminal fine to an insurer.
That is not a matter of finding the right endorsement or negotiating a more comprehensive General Contractor Liability Insurance package. It is a matter of public policy and settled insurance law. A criminal fine imposed because a business has breached health and safety law is intended to punish and deter that business. Allowing the company to pass the fine to an insurer would undermine that purpose.
The £1.15 million in fines imposed on Appledorn and T Vaughan therefore sits with the businesses themselves. It is a balance-sheet event, not an insured loss. The same principle applies to personal fines imposed on directors, managers or other individuals. A company policy cannot insure a person against a criminal fine or a custodial sentence.
This distinction is one of the most common misunderstandings we see when speaking to contractors. A business may have £10 million of employers’ liability cover, a commercial combined policy and a separate liability programme, but none of those covers the criminal penalty itself.
Legal expenses or defence costs can be a different question. Depending on the wording, separate legal expenses, directors’ and officers’ or corporate protection cover may assist with legal representation and certain investigation costs. That does not mean it pays the fine. Contractors need to check the policy wording carefully rather than assume that every cost connected with a prosecution is covered.
HSE prosecutions are also public record. That matters beyond the immediate fine. Tendering clients may consider enforcement history when deciding whether to award work, and insurers may take the conviction into account when assessing the business at renewal. The public record can influence the future cost and availability of cover even when no civil claim is ultimately made.
2. Employers’ liability is where the civil claim works
The criminal prosecution and the civil compensation claim are separate legal processes. They involve different tests, may be dealt with in different courts and can reach different outcomes.
Employers’ liability insurance exists to respond to compensation claims when an employee is injured or becomes ill because of their work. In Great Britain, most employers must hold EL cover as soon as they become an employer. The legal minimum is £5 million from an authorised insurer, although £10 million is standard in many commercial policies. The government’s Employers’ liability insurance guidance explains the basic requirements and penalties for failing to arrange cover.
The policy is intended to fund compensation and associated legal costs, not to pay an HSE punishment. If a worker is killed or seriously injured, the family’s civil claim may include loss of financial support, bereavement-related damages and other recognised heads of compensation. The value of that claim is assessed separately from any criminal fine.
The Appledorn case shows why historic records matter. Appledorn entered liquidation in 2023, before the criminal trial concluded. If a bereaved family were left to pursue only the company, there might be no meaningful assets available from which to recover compensation. Where valid employers’ liability insurance was in force at the time of employment, the historic insurer may still be identified and the claim pursued under the applicable rights against insurers process.
This is where the Employers’ Liability Tracing Office is particularly important. ELTO maintains a central database containing more than 40 million employers’ liability policy records spanning over a century. It exists to help claimants and their representatives identify the insurer that covered an employer during the relevant period, including where the employer has since dissolved, merged or ceased trading.
For contractors, the practical lesson is straightforward. Keep policy schedules, certificates, insurer details and policy years traceable from day one. If a claim arises years after a company has stopped trading, the record of who insured the business during the exposure period may be more important than the company’s current financial position.
3. The conviction changes the business’s future insurability
A serious incident does not end when the court imposes a fine.
A conviction becomes part of the company’s risk history. Future insurers will want to understand what happened, why it happened and what has changed. Clients awarding contracts may ask similar questions, particularly where the contractor is bidding for work involving excavations, demolition, roofing, structural alterations or work at height.
For T Vaughan, which remains trading and has been given six years to pay its fine, the conviction is now part of its commercial record. The company will need to demonstrate that its systems are not simply documented but implemented and monitored in practice.
The same applies to individuals. Directors, contracts managers and site supervisors can face personal prosecution where their acts or omissions contribute to an incident. Personal fines and custodial sentences are not insured by the company. A business should therefore consider whether it has suitable legal representation and investigation cover, while making sure managers understand their own responsibilities.
This is also where underwriters look beyond the certificate. They may ask about previous notices, prosecutions, claims, near misses, staff competence, subcontractor controls and the way safety responsibilities are allocated. A clean claims history is not enough if the management system appears weak.
4. Employers’ liability is compulsory, but the policy still needs checking
Having EL insurance does not automatically mean the business has the right protection.
Start with the limit. £5 million is the statutory minimum, but £10 million is common and a higher limit may be appropriate for contractors with larger workforces, multiple sites or a greater potential for catastrophic injury. The right limit depends on the actual business rather than a standard market assumption.
Check the named entities as well. Group companies, subsidiary businesses and separate trading names must be correctly included. It is surprisingly easy for a contractor to restructure, add a new company or change its trading arrangements without updating the policy.
Subcontractor arrangements need careful attention too. A genuine subcontractor may have their own liability arrangements, but labour-only subcontractors can be treated differently and may fall within your employers’ liability exposure. Do not rely solely on a certificate handed over at the start of a project. Check what the subcontractor is doing, who controls the work and whether their insurance remains current.
Other points worth reviewing include:
- The excess and whether the business could afford it following a serious incident.
- Claims notification requirements and what must be done immediately after an accident.
- The treatment of occupational disease and long-tail claims, including HAVS, asbestos, silica and noise-induced hearing loss.
- Whether all employees, temporary workers and relevant labour-only subcontractors are dealt with correctly.
- Whether legal costs, inquests and prosecution representation are covered or require separate insurance.
Many contractors assume their commercial combined policy or General Contractor Liability Insurance responds to everything connected with an incident. It does not. EL may respond to an employee’s civil compensation claim, while public liability may apply to injury to a third party. The criminal fine remains uninsured, and investigation or representation costs may sit under a separate section or separate policy.
The risk is not only an inadequate sum insured. It can also be the wrong entity, the wrong classification of worker or a gap in the policy wording.
5. The management system is the real risk control
Insurers price the risk presented by the business, not the quality of its paperwork alone.
The Hillbeck Homes case is a clear example. Securing the stairwell cover or installing suitable edge protection would have prevented the fall. The Banstead trench case carries the same practical message. Proper support and spoil management were basic precautions for a known excavation risk.
For most contractors, the most useful controls are not complicated:
- Use task-specific risk assessments for work at height, excavations and groundworks.
- Install physical safeguards, including guardrails, secured coverings, scaffolding and edge protection.
- Make sure the safeguards are checked after changes to the site.
- Provide supervision proportionate to the work and the experience of the people carrying it out.
- Record near misses and act on them rather than treating them as paperwork.
- Make sure subcontractor responsibilities are understood and monitored.
This is particularly important for groundworks, demolition and work-at-height contractors. Underwriters will often scrutinise these areas at renewal because the potential severity is high and the basic controls are well established.
A strong system also helps defend a civil claim. The risk assessment is not a substitute for safe work, but records showing how the work was planned, supervised and reviewed can be important evidence. More importantly, a management system that is followed on site is what prevents the incident in the first place.
What contractors should do now
The September enforcement cases are a reminder that fines and insurance run on separate tracks. EL cover can be vital when an injured worker or bereaved family seeks compensation, but it cannot pay the criminal penalty. The business must also consider its reputation, tendering position, future underwriting and the personal exposure of managers.
At Moyak Insurance Services, our individual approach means we look at how your business actually operates. We ask what trades you undertake, how many people and subcontractors are on site, which entities are involved and where the serious risks sit. Employers’ liability and liability cover for a groundworks contractor should not be structured in the same way as cover for a fit-out firm.
As a Business Insurance Broker in Essex, Kent and London, we work with leading UK master insurance brokers to help secure suitable cover for your budget and property, often saving small businesses a considerable amount on their insurance quotes.
Bring us your current EL schedule, policy wording and subcontractor arrangements. We can check the named entities, limits, worker classifications, notification requirements and the gaps between employers’ liability, public liability, legal expenses and other covers.
For official guidance, see the HSE employers’ liability publication, the HSE’s work at height guidance and the HSE report on the Banstead trench prosecution.
This article provides general information only. It is not advice on a specific incident, claim, prosecution or insurance policy.