What If Your Tether System Fails? Equipment Failure Insurance

Working at height is one of the most hazardous activities in construction, maintenance, and industrial sectors. Tether systems—including fall arrest equipment, harnesses, lanyards, and anchor points—are the critical safety barriers between workers and potentially fatal falls. But what happens when these life-saving systems fail? The consequences can be catastrophic, both in human and financial terms. This is where equipment failure insurance becomes not just advisable, but essential.

Understanding Tether System Failures

Tether systems are designed to prevent falls and protect workers operating at height. These systems include personal fall arrest equipment, work positioning systems, and fall restraint devices. Despite rigorous safety standards and regular inspections, failures can and do occur.

Common causes of tether system failures include:

• Manufacturing defects in harnesses, carabiners, or lanyards

• Wear and tear from regular use

• Improper maintenance or storage

• Incorrect installation of anchor points

• Environmental degradation from UV exposure, chemicals, or moisture

• Exceeding weight or load limits

• Using equipment beyond its certified lifespan

• Inadequate inspection procedures

• Human error during setup or use

When a tether system fails, the results can range from near-misses to serious injuries or fatalities. Beyond the immediate human cost, businesses face substantial financial exposure from compensation claims, legal fees, regulatory fines, project delays, and reputational damage.

The Financial Impact of Equipment Failure

The financial consequences of tether system failure extend far beyond the immediate incident. Consider the following potential costs:

Direct costs include:

• Medical treatment and rehabilitation for injured workers

• Compensation payments to injured parties or their families

• Emergency response and rescue operations

• Investigation costs from HSE or other regulatory bodies

• Legal defence fees if prosecuted for safety violations

• Fines and penalties for breaching health and safety regulations

• Replacement of failed equipment

• Temporary labour costs while injured workers recover

Indirect costs include:

• Project delays and associated penalties

• Lost productivity during investigations and work stoppages

• Increased insurance premiums following claims

• Reputational damage affecting future contract opportunities

• Staff morale and retention issues

• Additional training and safety measures implementation

• Management time diverted to incident response

A single serious incident involving tether system failure can easily cost a business hundreds of thousands of pounds, potentially threatening the viability of smaller contractors and trades businesses.

What Equipment Failure Insurance Covers

Equipment failure insurance, often included within broader commercial combined or contractors' insurance policies, provides crucial financial protection when safety equipment fails. Understanding what's covered helps businesses make informed decisions about their insurance needs.

Typical coverage includes:

Liability protection: If your tether system fails and causes injury to an employee or third party, equipment failure insurance covers compensation claims, legal defence costs, and associated expenses. This extends to both employers' liability (for your staff) and public liability (for others affected).

Legal defence costs: Even if you're not found liable, defending against claims following equipment failure can be expensive. Insurance covers legal representation, expert witnesses, and court costs.

Regulatory defence: If the HSE prosecutes your business following a tether system failure, insurance can cover legal defence costs, though fines themselves are typically not insurable.

Equipment replacement: Some policies cover the cost of replacing failed equipment, particularly if the failure was due to a manufacturing defect or hidden flaw rather than negligence.

Business interruption: If a tether system failure forces work stoppage, business interruption coverage compensates for lost income during the investigation and remediation period.

Reputational harm mitigation: Some comprehensive policies include crisis management support to help manage the reputational fallout from serious incidents.

Contractual liability: If equipment failure causes you to breach contract terms, insurance may cover associated penalties and legal costs.

Key Exclusions and Limitations

While equipment failure insurance provides valuable protection, it's essential to understand what's typically not covered:

Deliberate negligence: If investigations reveal you knowingly used defective equipment or ignored safety protocols, claims may be denied.

Lack of maintenance: Failure to conduct required inspections or maintain equipment according to manufacturer guidelines can void coverage.

Unqualified operators: If equipment is used by workers without proper training or certification, insurers may refuse claims.

Exceeding specifications: Using equipment beyond its rated capacity or for purposes it wasn't designed for typically isn't covered.

Expired equipment: Using tether systems beyond their certified lifespan or expiry dates is a common exclusion.

Fines and penalties: Regulatory fines imposed by the HSE or other bodies are generally not insurable, though legal defence costs may be covered.

Intentional acts: Any deliberate actions that compromise equipment integrity won't be covered.

Understanding these exclusions emphasizes the importance of maintaining rigorous safety standards alongside insurance protection. Insurance is a safety net, not a substitute for proper equipment management.

Who Needs Equipment Failure Insurance?

Any business whose workers operate at height using tether systems should consider equipment failure insurance as essential. This includes:

Construction contractors: Builders, roofers, scaffolders, and general contractors regularly work at height and rely on fall protection systems.

Specialist trades: Steeplejacks, window cleaners, gutter installers, painters and decorators, and cladding specialists face daily height-related risks.

Industrial maintenance: Factory maintenance teams, warehouse operatives, and industrial cleaning contractors often work on elevated platforms and structures.

Utilities and telecoms: Engineers working on power lines, telecoms masts, and utility infrastructure depend on reliable tether systems.

Tree surgeons: Arborists working at height in trees face unique risks where equipment failure can be catastrophic.

Entertainment and events: Riggers, lighting technicians, and stage crew working on elevated structures need comprehensive protection.

Facilities management: Building maintenance teams, HVAC engineers, and property maintenance contractors regularly access roofs and elevated areas.

The higher the frequency of working at height and the greater the number of workers involved, the more critical equipment failure insurance becomes.

Integrating Insurance with Safety Management

Equipment failure insurance should complement, not replace, robust safety management systems. The most effective approach integrates insurance protection with proactive risk management:

Regular equipment inspections: Conduct pre-use checks, detailed periodic inspections, and annual certifications by competent persons. Maintain comprehensive records of all inspections.

Maintenance schedules: Follow manufacturer guidelines for cleaning, storage, and maintenance. Replace components according to recommended schedules, not just when visibly worn.

Training and competency: Ensure all workers are properly trained in equipment use, inspection, and emergency procedures. Maintain training records and provide refresher courses.

Equipment tracking: Implement systems to track equipment age, inspection history, and usage. Retire equipment before it reaches end-of-life.

Supplier quality: Purchase tether systems from reputable manufacturers with appropriate certifications. Verify compliance with relevant British and European standards.

Incident reporting: Establish clear procedures for reporting equipment concerns, near-misses, and failures. Investigate all incidents thoroughly.

Documentation: Maintain detailed records of equipment purchases, inspections, maintenance, training, and incidents. This documentation is crucial for insurance claims and regulatory compliance.

Insurers often offer premium discounts for businesses demonstrating excellent safety management, recognizing that prevention reduces claims.

Choosing the Right Coverage

Selecting appropriate equipment failure insurance requires careful consideration of your specific risks and operations:

Assess your exposure: Consider the frequency of working at height, number of workers involved, types of equipment used, and complexity of operations.

Coverage limits: Ensure liability limits are adequate for potential claims. Serious injury or fatality claims can exceed £1 million. Many businesses opt for £5-10 million public liability coverage.

Policy scope: Verify that equipment failure is explicitly covered, not excluded. Some policies have specific clauses for safety equipment failures.

Excess levels: Balance premium costs against excess amounts you can afford to pay in the event of a claim.

Business interruption: Consider whether you need coverage for income loss if equipment failure halts operations.

Legal expenses: Ensure adequate coverage for legal defence, particularly given increasing HSE prosecutions.

Geographical coverage: If you work internationally, ensure coverage extends to all operating locations.

Specialist insurers: Consider insurers specializing in construction and trades who understand height work risks better than generalist providers.

The Claims Process

Understanding the claims process helps ensure smooth resolution if the worst happens:

Immediate response: Following any incident involving equipment failure, prioritize safety, provide medical assistance, and secure the scene. Notify your insurer as soon as practically possible, typically within 24-48 hours.

Evidence preservation: Preserve failed equipment for investigation. Document the scene with photographs and witness statements. Don't dispose of anything until insurers and investigators have completed their work.

Investigation cooperation: Cooperate fully with HSE investigations, insurer assessments, and any legal proceedings. Provide all requested documentation promptly.

Documentation submission: Supply inspection records, training certificates, equipment purchase records, and maintenance logs. Comprehensive documentation strengthens your position.

Legal representation: Your insurer will typically appoint solicitors to handle claims. Cooperate fully with your legal team and provide all requested information.

Settlement negotiation: Insurers will negotiate settlements on your behalf. Serious claims may take months or years to resolve, particularly if liability is disputed.

Learning and improvement: Use the claims process as an opportunity to identify improvements in your safety management systems.

Cost Considerations

Equipment failure insurance costs vary significantly based on multiple factors:

Business size and turnover: Larger operations with higher turnover typically pay more in absolute terms, though rates may be more favorable.

Claims history: Previous claims, particularly multiple claims, significantly increase premiums. A clean claims history can reduce costs.

Safety record: Demonstrable commitment to safety through certifications, training, and management systems can reduce premiums by 10-30%.

Type of work: High-risk activities like steeplejacking or industrial rope access attract higher premiums than occasional low-level work.

Coverage limits: Higher liability limits increase premiums proportionally.

Excess levels: Accepting higher excess amounts reduces premiums but increases out-of-pocket costs if you claim.

Number of workers: More employees working at height increases exposure and premiums.

As a rough guide, small contractors might pay £500-2,000 annually for comprehensive coverage, while larger operations could pay £5,000-20,000 or more. Specialist high-risk contractors may face even higher premiums.

Regulatory Compliance and Insurance

Equipment failure insurance intersects significantly with regulatory compliance. The Work at Height Regulations 2005 place strict duties on employers to:

• Avoid work at height where possible

• Use work equipment to prevent falls where work at height cannot be avoided

• Mitigate the distance and consequences of falls where risks cannot be eliminated

The Provision and Use of Work Equipment Regulations 1998 (PUWER) require that work equipment, including tether systems, is:

• Suitable for intended use

• Maintained in safe working order

• Inspected at appropriate intervals

• Used only by trained workers

The Health and Safety at Work Act 1974 places overarching duties on employers to ensure worker safety "so far as is reasonably practicable."

While insurance doesn't exempt you from these legal duties, it provides crucial financial protection if, despite your best efforts, equipment fails and claims arise. Insurers will examine whether you met your legal duties when assessing claims, making compliance essential for coverage.

Conclusion

Tether system failures, while hopefully rare, carry devastating potential consequences. Equipment failure insurance provides essential financial protection against the substantial costs of injuries, claims, legal proceedings, and business disruption that can follow such incidents.

However, insurance should never be viewed as a substitute for rigorous safety management. The most effective approach combines comprehensive insurance coverage with proactive risk management, regular equipment inspection and maintenance, thorough worker training, and a strong safety culture.

By understanding what equipment failure insurance covers, recognizing its limitations, and integrating it within broader safety management systems, businesses working at height can protect both their workers and their financial viability. In an industry where a single equipment failure can end careers, businesses, and lives, this protection isn't optional—it's essential.

Meta Description: Discover how equipment failure insurance protects your business when tether systems fail. Learn about coverage, costs, exclusions, and integrating insurance with safety management for working at height.