Statutory Liability
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Statutory liability insurance
Statutory liability is a type of insurance coverage that protects you and your business from the financial consequences of unintentionally breaking most of New Zealand’s many laws. Statutory liability insurance protects not only the business and its employees but also specific individuals like directors, trustees, and managers, covering unintentional breaches of certain statutory laws and providing access to legal assistance in the event of investigation or prosecution.
Why is statutory liability important?
Statutory liability cover is vital because it provides protection against financial losses that may arise due to certain unintentional breaches of specific statutes. Nobody is perfect, and even with the best intentions, mistakes can happen. Unfortunately, these mistakes can lead to hefty fines and penalties. Statutory Liability can help cover these costs, giving business owners peace of mind knowing they have financial protection in place.
Statutory liability is necessary component of your business risk management, its affordability makes it a wise investment. In New Zealand, the average cost typically ranges between NZ$15 – NZ$30 per month.

It’s crucial to have statutory liability coverage if your business:
Interacts with the public regularly
Handles customer data
Deals in potentially risky sectors
Has a physical space
Operates with commercial businesses
What does statutory liability insurance cover?
Statutory liability insurance provides your business with essential protection against unintentional breaches of New Zealand laws or statutes, covering defence costs and legal defence costs incurred during legal proceedings.
Fines and penalties
New Zealand’s regulatory bodies can impose heavy fines and penalties for alleged breaches of specific statutes. Statutory Liability Insurance helps cover these costs, including cash penalties payable and defense costs incurred by the insured following conviction for an offence under an insured statute, preventing a financial catastrophe for your business.
Legal costs
If you're accused of breaching a statute, you'll likely need legal representation, which can be costly. Statutory Liability Insurance can cover these legal fees, saving you from substantial out-of-pocket expenses.
Claims expenses
In some instances, a third party might claim compensation due to your business breaching a statute. The claims expenses, which include the costs of investigating and defending the claim, can be covered by Statutory Liability Insurance.
How much does statutory liability insurance cost?

Statutory liability premiums are calculated on several different factors including:
- Limit of cover
- Type of industry
- Location
- Turnover
Statutory insurance in NZ typically costs between $15 to $30 per month.
Who needs Statutory Liability Insurance NZ?
Any business that operates within the jurisdiction of New Zealand’s many statutes should consider Statutory Liability Insurance. This includes businesses of all sizes and from all sectors. Whether you’re a small start-up or a large corporation, if you’re conducting business, you’re potentially at risk of unintentionally breaching a statute. Examples of statutes that businesses may unintentionally breach include the ‘Health & Safety in Employment Act’ and the ‘Resource Management Act’, highlighting the need for statutory liability insurance.
In New Zealand, Statutory Liability Insurance is not legally required. However, that doesn’t mean it’s not crucial. You see, when you’re running a business, you’re playing by a set of rules – these are the laws or statutes. Now, even if you try your best, there might come a time when you accidentally break one of these rules. When that happens, you could face significant financial penalties. That’s where Statutory Liability steps in. It’s like having a helpful buddy who can cover these unexpected costs for you. So, while it’s not mandatory, it is a strong recommendation for any business, big or small, to safeguard against these potential financial risks.
Imagine you’re playing a sport, any sport will do. Regardless of what game you’re playing, there are always rules to follow, right? The same is true when you’re running a business, no matter what type it is or what industry it’s in. You could be selling cupcakes, building houses, or designing websites; there will be laws or rules you must follow. If you accidentally break one of these laws, Statutory Liability Insurance can cover the costs associated with the unintentional breach. So, whether your business is large or small, or whether you’re a baker, builder, or web designer, you should seriously consider Statutory Liability Insurance.
Top professions that need statutory liability insurance
In New Zealand, Statutory liability insurance is a critical safeguard for many professions, protecting them against breaches of most New Zealand Statutory Acts of Parliament.
How do I get proof of statutory liability insurance
You can usually get proof of insurance same day when you purchase through Gerrards.
Acquiring a statutory liablility insurance certificate from traditional insurance brokers may require a few weeks, a delay that could create problems for people or businesses who need instant insurance proof..
To obtain insurance coverage promptly, contact us. We may require you to provide some fundamental details about your business, such as:
The name of your business
The nature of your business activities
The total number of employees
Predicted annual income
Years of experience in the industry
What Does Statutory Liability Insurance Not Cover?
Statutory Liability Insurance does not cover:
Intentional acts
If you intentionally breach a New Zealand statute, your insurance won’t cover the resulting fines or legal fees. Insurance is there to protect you from mistakes, not deliberate or reckless acts.
Contractual liability
While Statutory Liability Insurance covers a broad range of statutes, there are some it doesn’t cover. If a claim arises due to a breach of an uninsured statute such as the Crimes Act 1961, you won’t be covered.
Claims under uninsured statutes
While Statutory Liability Insurance covers a broad range of statutes, there are some it doesn’t cover. If a claim arises due to a breach of an uninsured statute such as the Crimes Act 1961, you won’t be covered.
Infringements of intellectual property rights
Breaches of copyright, patents, trademarks, or other intellectual property rights are typically not covered under Statutory Liability Insurance.
Fines for breaches of the Health & Safety at Work Act 2015
Statutory liability will not cover any fines passed onto you as a result of breaching the Health & Safety at Work Act 2015. This is because it is illegal under this Act for insurance companies to pay the fine.
Other common questions
Yes, it generally does cover actions taken by your employees. Imagine you’re a coach of a sports team. If one of your team members makes a mistake during a game, it affects the whole team, right? In the same way, when one of your employees accidentally breaks a law while doing their job, it can impact your entire business. That’s why Statutory Liability Insurance covers such situations. But remember, this only applies to unintentional mistakes. If an employee breaks a law on purpose, your insurance won’t cover it.
Absolutely. Being self-employed doesn’t mean you’re off the hook when it comes to laws and regulations. Just like any other business, if you’re self-employed and you unintentionally break a law, you could be held financially responsible. Think about it as being a one-man sports team. If you make a mistake, there’s no one else to share the blame, and you have to face the consequences alone. That’s why having Statutory Liability Insurance can be very helpful, offering a financial safety net to fall back on in case things go wrong.
Yes it can, however this dependent on your retroactive date and if the breach was already known. If the breach is unknown and your retroactive date is before when the breach occurred then the policy will provide cover.
It is common for policies to have an unlimited retroactive date. This means they will provide cover any unknown past breaches. These policies typically do cost more because of this.
This is like asking, “How can I get better at a sport?” Practice helps, of course, but understanding the rules and strategies can make a big difference too. In the case of your business, “practice” means consistently ensuring you and your team are up to date with the laws that apply to your business. “Understanding the rules and strategies” can involve getting legal advice or conducting regular audits to make sure you’re not accidentally breaking any laws. Investing in training for your employees is also a good idea, as it can help them understand what they need to do (and not do) to avoid mistakes.