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Statutory Liability Insurance

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Frequently asked questions about statutory liability insurance

Statutory liability insurance is one of the most common and essential policies for businesses operating in New Zealand. To help you understand its importance, we’ve compiled the most frequently asked questions about statutory liability.

Statutory Liability Insurance Requirements and Coverages

Is Statutory Liability Insurance Required by Law in New Zealand?

While it’s not a legal requirement in New Zealand, statutory liability insurance is critical for businesses. It covers you against unintentional breaches of statutes, regulations, or acts that result in fines, penalties, or reparations. Without it, your business may face substantial financial risks.

What Does Statutory Liability Insurance Cover?

Statutory liability insurance provides coverage for defense costs, fines, and penalties associated with unintentional breaches of New Zealand’s various statutes. These may include the Health and Safety at Work Act, Resource Management Act, Building Act, Fair Trading Act, and many others.

How Much Cover Do I Need?

The amount of coverage you need varies based on your business activities, size, and the risks associated with your industry. It’s crucial to have a discussion with an insurance broker, like us at Gerrards, who can help determine the right level of cover to adequately protect your business.

Do Sub-contractors Need Statutory Liability Insurance?

Yes, sub-contractors should also have their own statutory liability insurance. Despite having an overarching policy, businesses cannot always extend their coverage to independent contractors. They should carry their own insurance to protect against potential legal action

Statutory Liability Insurance in New Zealand

What is Unique About Statutory Liability in New Zealand?

New Zealand is unique in that it has a broad range of acts and regulations, and breaches can result in substantial fines, penalties, or reparations. Statutory liability insurance in New Zealand is specifically designed to cover the financial consequences of these unintentional breaches. In some countries, statutory liability insurance might not cover fines and penalties, but in New Zealand, this is typically part of the coverage, making it particularly beneficial for businesses operating within the country.

Does Every Business in New Zealand Need Statutory Liability Insurance?

While statutory liability insurance isn’t a legal requirement in New Zealand, it is strongly recommended for all businesses, regardless of their size or industry. The reason is straightforward: every business in New Zealand is subject to a range of statutory duties and obligations. Failing to comply, even unintentionally, can lead to prosecution, fines, penalties, and reputational damage. Statutory liability insurance provides protection against these potential risks and ensures your business can continue to operate even in the face of unexpected legal challenges.

Is Statutory Liability Insurance Expensive in New Zealand?

The cost of statutory 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 $15 – $30 a month.

How to Buy Statutory Liability Insurance with Gerrards

How Long Does it Take to Buy Statutory Liability Insurance through Gerrards?

We can provide multiple quotes from top insurers in 24 hours or less. This quick turnaround enables you to compare and choose the right cover for your business needs without unnecessary delays.

Statutory Liability Insurance Certificate

Once you decide on a policy, we issue a Statutory Liability Insurance Certificate. This document serves as proof of your coverage and outlines your policy details, including coverage limits and terms.

What industries can Gerrards obtain statutory liability cover for? 

At Gerrards, we’re equipped to offer coverage for all industries. We understand that every business is unique and has different needs and risks, and we’re ready to help guide you to the right policy for your situation.

Statutory Liability Claims

How Do I Make a Statutory Liability Insurance Claim?

Making a claim is straightforward with Gerrards. You can contact us directly, and we’ll deal with the insurance company for you, advocating on your behalf throughout the process.

What Are Some Common Statutory Liability Claims?

A manufacturing company prides themselves on maintaining a safe workspace, but one day, an employee slips on a wet floor in the warehouse, resulting in a serious injury. An investigation reveals that the company didn’t have adequate signage in place to warn of the wet floor. The company is subsequently found in breach of the Health and Safety at Work Act and fined. Their statutory liability insurance would step in to cover the defense costs. Statutory liability cannot cover the fines in this instance as insurance companies are barred from paying Health & Safety At Work Act fines in New Zealand. 

A property development firm has recently embarked on a new residential project. Despite careful planning, the company inadvertently violates environmental regulations during construction, damaging a protected wetland area. This violation constitutes a breach of the Resource Management Act, and the firm is slapped with a hefty penalty. Their statutory liability insurance helps to cover the costs associated with this breach.

A retailer makes exaggerated claims about their products in their marketing materials. These claims are deemed misleading, resulting in a breach of the Fair Trading Act. The company faces legal action and potential fines. Fortunately, their statutory liability insurance provides coverage for the legal defense costs and any imposed fines.

A reputable architectural firm, designs a commercial building. However, a minor oversight in the design does not comply with the Building Code, leading to problems once the structure is built. The company is found in breach of the Building Act and is required to pay reparations. Their statutory liability insurance would cover the defense costs and reparations.

Statutory Liability Insurance Policy Changes

What Happens If I Need to Change My Insurance Later?

If your business evolves or your risk profile changes, you may need to adjust your coverage. At Gerrards, we make the process seamless and ensure that your business remains adequately protected.

What Happens If I Cancel My Statutory Liability Policy?

If you cancel your policy without a suitable replacement, you leave your business exposed to potential statutory breaches, resulting in significant financial repercussions. It’s crucial to maintain appropriate coverage at all times.

Comparing Statutory Liability Insurance with Other Policies

Statutory Liability vs Public Liability

While statutory liability insurance covers breaches of statutes resulting in fines or penalties, public liability insurance covers injuries or property damage your business causes to third parties. They are different policies and cater to different types of risk.

Statutory Liability vs Professional Indemnity

Professional indemnity insurance covers claims arising from professional negligence or errors in your services or advice, while statutory liability insurance covers unintentional breaches of acts or statutes. Both types of insurance are crucial for different reasons.

Statutory Liability vs Employers’ Liability

Employers’ liability insurance covers claims arising from injuries or illnesses your employees may suffer due to their work, while statutory liability covers fines and penalties from unintentional breaches of statutes. Each serves a different purpose and offers distinct protection.

Do you have further questions about statutory liability insurance?

We hope this guide has shed light on the intricacies of statutory 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 statutory 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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