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Employers Liability Insurance

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Frequently asked questions about employers liability insurance

Employers liability insurance is one of the most common insurance policies that businesses in New Zealand require. Given its importance, there are many questions that business owners often have about this type of insurance.

Employers Liability Insurance Requirements and Coverages

Is Employer’s Liability Insurance Required by Law in New Zealand?

No, employers liability insurance is not a legal requirement in New Zealand. ACC is a legal requirement however this government administered insurance does not cover non-accidental illnesses or mental harm so employers should consider purchasing employers liability insurance for these risks.

What Does Employers Liability Insurance Cover?

Employers liability insurance typically covers the legal liability of an employer for accidental bodily injury or diseases arising out of and in the course of an employee’s employment that are not covered by the ACC. This includes damages for mental harm, work-related diseases, or conditions caused gradually over time, and exemplary damages awarded by the courts.

How Much Cover Do I Need?

The amount of coverage you need varies based on your business size, industry, and risk profile. Generally, small businesses might need coverage starting at $500,000, while larger businesses may need millions in coverage. Consulting with a professional insurance broker like Gerrards can help determine the amount of coverage necessary for your specific business.

Do Contractors Need Employers Liability Insurance?

Yes, contractors should also have their employers liability insurance if they have employees. Employers liability only covers employees of the business. It does not cover independent contractors. They should carry their own insurance to protect against potential legal action

Employers Liability Insurance in New Zealand

What’s Unique About Employers Liability in New Zealand?

New Zealand has a unique approach to employers liability, particularly due to the comprehensive nature of its Accident Compensation Corporation (ACC) scheme. The ACC is a no-fault scheme that provides personal injury cover for all New Zealand citizens, residents, and temporary visitors to the country. This includes workplace accidents.

Under this system, employees generally cannot sue their employers for accidental injury compensation. However, the ACC does not cover non-accidental harm, such as specific work-related illnesses or conditions that have developed over time, stress-induced psychological harm, or exemplary damages awarded by the courts. Therefore, businesses often need additional employers liability insurance to protect themselves from these risks.

Does Every Business in New Zealand Need Employers Liability Insurance?

While not legally mandated, employers liability insurance is highly recommended for all businesses in New Zealand due to the limitations of the ACC coverage. Whether you run a small company with a handful of staff or a large corporation with hundreds of employees, this insurance safeguards your business from potential claims related to illnesses, diseases, or harm not covered by ACC.

Is Employers Liability Insurance Expensive in New Zealand?

The cost of employers liability insurance varies. It depends on your type of business, the risks associated with your operations, and how much cover you need. Most small businesses can expect to pay $10 – $15 a month.

How to Buy Employers Liability Insurance with Gerrards

How Long Does It Take to Buy Employers Liability Insurance Through Us?

We can get multiple quotes from top insurers in 24 hours or less. Additionally, we can provide advice about coverage limits and help you choose the policy that best fits your business. Once the policy is agreed upon, we can send a certificate of insurance promptly.

Employers Liability Insurance Certificate

An employers liability insurance certificate is proof that your business is insured. It lists the coverage limits, policy number, effective dates, and insurers. This certificate is often required when securing contracts or meeting regulatory requirements.

What Industries Do We Offer Cover For?

Gerrards offers cover for businesses in any industry. From retail and hospitality to construction and manufacturing, our team has the experience and knowledge to guide you through the insurance process and help manage your risks.

Employers Liability Claims

How Do I Make an Employers Liability Insurance Claim?

If you need to make a claim, simply contact us at Gerrards. We’ll deal with the insurance company for you, advocating on your behalf to ensure the process is as smooth as possible.

What Are Some Common Employers Liability Claims?

Consider a plastics manufacturing company. They have been in operation for several years, and their longest-serving employee, Mary, has developed severe respiratory issues. Her doctor confirms that prolonged exposure to plastic fumes in her workplace caused her condition. The ACC does not cover this as it is a gradual process harm. Therefore, Mary claims compensation from the plastics company. Fortunately, the plastics company has employers liability insurance, which covers the cost of Mary’s treatment and any associated legal fees.

Let’s take the example of a construction company. One day, a newly hired worker, John, falls from a faulty scaffolding on the worksite. He suffers from several broken bones and is unable to work for months. While ACC covers his medical bills and provides income compensation, it doesn’t cover the cost of rehabilitation for John to regain his full range of motion. John decides to claim these additional costs from the construction company. With employers liability insurance, the company can cover these additional costs without financial strain.

Imagine a busy marketing agency. Lately, they have been working on a high-pressure campaign with tight deadlines. One of their key team members, Alex, is pushed to work long hours consistently for several weeks, leading to severe stress and eventually a mental breakdown. As ACC does not cover mental injuries unless they are caused by certain traumatic events, Alex claims compensation from the marketing agency. With their employers liability insurance, the agency can manage this unexpected expense.

Employers Liability Insurance Policy Changes

What Happens If I Need to Change My Insurance Later?

At Gerrards, we understand that business needs change over time. If you need to adjust your coverage, simply reach out to us. We’ll work with you to modify your policy so that it continues to meet your needs.

What Happens If I Cancel My Employers Liability Policy?

Cancelling your employers liability policy leaves your business exposed to potential claims from employees. Without insurance, you could be personally liable for any injury, illness, or exemplary damages related to workplace incidents.

Comparing Employers Liability Insurance with Other Policies

Employers Liability vs Public Liability

While employers liability insurance covers claims made by employees for injuries or illnesses stemming from their work, public liability insurance covers claims made by third parties, such as customers or visitors, who may be injured or whose property may be damaged due to your business operations.

Employers Liability vs Professional Indemnity

Professional indemnity insurance is designed to protect professionals who provide advice or services. If your advice or service leads to a client’s financial loss, professional indemnity insurance can cover the legal costs and damages. Employers liability, on the other hand, covers claims related to employee injuries or illnesses resulting from their work.

Employers Liability vs Employment Disputes

Employers liability insurance protects your business against claims related to work-related injuries or illnesses not covered by ACC, while employment disputes insurance, sometimes known as employment practices liability insurance, covers legal costs and damages related to allegations of unfair dismissal, discrimination, harassment, and other employment-related issues. It’s crucial to remember that these two types of insurance address different risks within the employer-employee relationship and often complement each other in a comprehensive business insurance package.

Do you have further questions about employers liability insurance?

We hope this guide has shed light on the intricacies of employers liability insurance in New Zealand. However, we understand that every business is unique, and you might still have questions specific to your situation. At Gerrards Insurance Brokers, we’re here to help. If you have any further queries about employers liability insurance, or any other insurance need, please don’t hesitate to contact us. Our team of experienced professionals is always ready to provide personalised advice and solutions tailored to your business. 

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