Statutory Liability Insurance – Things You Need to Know
There are a wide range of offences under many different statutes that companies, directors, employees and other organisations can breach. A statutory liability policy covers you to defend an unintentional breaches as well as the fines that a legally indemnifiable and reparations under Health and Safety legislation.
Why is it important to have cover?
All companies will have some exposure to breaching any number of statutes just carrying out their operations. It’s therefore prudent to mitigate these types of risks from your business.
What types of statutes are covered?
Courts can issue fines and other penalties based on what is prescribed under a statute. There are statutes and rules that apply to a wide range of a company’s daily activities. From the health and safety of our employees to the obligations owed to consumer customers, to how you advertise your products. Basically any legal rule or regulation you have to follow could result in an investigation if you breach it.
Here are just a few examples of some different types of statutes that could be breached:
|Fair Trading Act||The Commerce Commission can bring actions for breaches of this legislation where an example includes making false claims in marketing campaigns.|
|Human Rights Act||The Human Rights Review Tribunal can decide on whether anti-discrimination laws have been breached. For example the case Alpine Energy Ltd v The Human Rights Review Tribunal et al in 2014 involved a claim for discrimination based on an application for employment being unsuccessful based on age.|
|Resource Management Act||The Act does not allow the discharging of contaminants into the environment under section 15. Penalties for offences can include fines up to $300,000.|
|Sale and Supply of Alcohol Act||Section 252 of the Act does not allow a licenced premises to allow an intoxicated person to remain on the premises, or must be taken to a place of safety on the premises. A breach of this can result in a fine of $5,000 as well as any legal costs to defend a prosecution.|
|Health and Safety||There are a large number of investigations and prosecutions by Worksafe in relation to breaches of health and safety where employees have been injured at work. There are plenty of examples at:http://www.business.govt.nz/worksafe/news/releases|
Which statutes are usually excluded?
Generally criminal and transport related offences are excluded due to the moral hazard involved in covering people for these types of activities with insurance. The statutes generally excluded include Arms Act 1983, Crimes Act 1961, Aviation Crimes Act 1972, Transport Act 1962 and a number of other related acts.
Disclaimer: There are other factors and policy exclusions that may influence whether a claim is covered by a policy or not. Policy coverage will solely be determined by the policy documents and policy wording, and no reliance can be placed on the content of this blog post whatsoever. The content and examples of this blog post are only given to provide a general understanding or to help explain a specific concept.