The legislation leaves companies facing unlimited fines following fatal accidents if there has been gross failure by senior managers.

A standard Directors' and Officers (D&O) insurance policy will only provide cover for a senior individual within a company being prosecuted for management failure leading to a death of an employee or a third party.

A standard D&O policy will not cover the costs of the company's defence of such an allegation and the wider stigma of being associated with a negligent individual.

The legislation could lead to companies facing prosecution for breach of their duty in areas not previously considered.

An example could be a company's failure to ensure its employees cars are kept in a roadworthy condition when being used in the course of their employment, even in cases where employees are using their own vehicles.

Lawyers are advising organisations to take immediate steps to put their health & safety practices and procedures in order.