Reg Brown, underwriter of Lloyd's Syndicate 702, warns that companies will face heavy fines if they are found guilty of the proposed new charge of 'corporate killing'.

A change in the law is planned by the government making it easier to prosecute companies for management failures that cause or contribute to fatal accidents.

Under current law it is necessary to identify a director who is the 'controlling mind' responsible for the negligent behaviour of the company.

It is because of this that several high-profile court actions against large corporations have collapsed.

In February the Court of Appeal backed the acquittal of Great Western Trains on charges following the 1997 Southall train crash.

But prosecutions against smaller companies have tended to be more successful.

The Law Commission recommended action four years ago and consultations have begun by the Home Office on implementing the Commission's proposals.

The aim of the introduction of a 'corporate killing' offence is intended to favour the prosecution of companies rather than directors.

To protect companies against the costs of representation at official investigations Company Liability (Entity) Insurance can be purchased.

Brown says: "The proposed new legislation does not contain any guidelines or limits on the amounts of fines which could be imposed for corporate killing."

Insurers will not respond to fines on the basis that to do so would be contrary to public policy – a wrongdoer should not be entitled to indemnify for the consequences of their own criminal actions.

But both companies and their directors must ensure they can call on expert legal assistance to maximise their chances of conducting a successful defence.

"Directors' & Officers' Liability Insurance and Entity Insurance can provide the resources to enable this to be achieved," Brown added.