4 min read
What Is Statutory Liability Insurance?
Statutory liability insurance covers the defence costs and, where insurable, the fines or reparations that follow an unintentional breach of New Zealand legislation - the Health and Safety at Work Act being the big one. Here's what it does.
What it covers
Businesses are subject to a wide range of Acts - health and safety, resource management, the Building Act, Fair Trading, and more. If your business unintentionally breaches one, statutory liability can cover the legal costs of defending the matter and, where the law allows it to be insured, associated reparations.
It's specifically for unintentional breaches. Deliberate or reckless conduct isn't covered - the point is to protect a business that got something wrong despite trying to do the right thing.
Why it matters in New Zealand
The Health and Safety at Work Act carries significant duties and penalties, and enforcement is active. A prosecution can be expensive to defend even where a business ultimately did most things right. Statutory liability, often bought alongside management liability, helps a business weather that.
Note that fines under the Health and Safety at Work Act generally can't be insured, but defence costs and court-ordered reparations often can - a broker can explain exactly where the line sits.