Directors and officers can be personally liable for their company's food safety violations

Categories: Business Insurance
Jul 12th, 2017 | By: Rob McFarlane

Directors and officers of businesses that import and/or handle food should take it upon themselves to ensure their companies and employees are adhering to all relevant food safety legislation. Otherwise, they could be found personally liable for violations and hit with severe penalties.

Directors and officers do not need to be directly involved in a breach to be pursued by enforcement agencies. By simply allowing it to occur, they can be held legally responsible.

The Export and Import Permits Act (EIPA) governs what goods are allowed in and out of Canada. An individual can be fined $25,000 and jailed for 12 months for violating the EIPA. In some cases, judges can decide the fine amounts and jail individuals for 10 years.

The Safe Food for Canadians Act (SFCA), adopted in 2012, consolidated food inspection regulations under four Acts. Under the SFCA, individuals can be fined $5 million and jailed for two years. In certain cases, the court can impose their own fine amounts and jail individuals for up to 5 years.

For less serious violations, the Canadian Food Inspection Agency can issue smaller monetary penalties to the company.

To minimize the potential for personal liability, directors and officers should become familiar with all Canadian food safety legislation and ensure that compliance policies and procedures have been implemented. In the event that a violation has occurred, you must be able to demonstrate that you took measures to prevent it from happening.

Contact a CapriCMW Risk Advisor for more insurance and risk-related information and resources.

 

Source: "The serious business of food safety" by Wendy Wagner and Anastasia Semenova of Gowling Lafleur Henderson LLP (December 11, 2015).

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