The UK’s new corporate manslaughter law could cost businesses more than £21m in legal bills, an insurer has claimed.

Hiscox called on firms to review their existing risk management procedures ahead of the legislation which comes into force on 6 April.

After a 10-year battle between campaigners and regulators, executives will be held responsible when corporate negligence results in death at work. Under the rules, companies face a criminal conviction and unlimited fines following fatal accidents if there has been gross failure by senior managers.

Hiscox said not only do the rules increase the pressure on company bosses but businesses also need to assess whether they are covered financially for the worst-case scenario.

According to recent research, more than 50 per cent of employers are not prepared for the introduction of the new law, while a third of small to medium-sized businesses are concerned that their business could become a victim of the UK’s growing compensation culture.

Callum Taylor, management liability underwriting manager at Hiscox said: “With less than 100 days to go until the Corporate Manslaughter Act comes into force, companies could face prosecution for breach of their duty in areas they have not previously considered.

“As well as having to cope with expensive legal bills, companies facing legal action under the new Act risk their reputation being damaged, and the day to day running of their business being disrupted.

“We don’t yet know how often or how rigorously judges will implement this law, but one thing very clear is that the Act is going to be another worry to add to the many already faced by businesses.”