Provides cover for a company, directors, officers and employees where they have unintentionally broken the law and face criminal prosecution that could lead to fines and penalties imposed by the courts. It also covers the legal costs of investigating and defending claims.
The complexity and risks of running a business in New Zealand’s highly regulated environment are increasing.
Protecting your business
Statutory Liability is designed to protect you and your business from fines and penalties imposed by the courts, and the costs of defending yourself for unintentional breaches of most laws in New Zealand. Please see the list beside of examples of some government acts.
It also can cover reparations sentences imposed by the courts following a conviction under the Health and Safety at Work Act. These amounts are paid to the victim or their family for emotional harm; property damage; or consequential losses.
· Health & Safety at Work Act 2015
· Food Act 2014
· Resource Management Act 1991
· Building Act 2004
· Consumer Guarantees Act 1993
· Fair Trading Act 1986
· Privacy Act 1993
What type of businesses need Statutory Liability Insurance?
All business should hold statutory liability insurance no matter what the size of the operation. This includes any individual providing products or services to the public.
The insured, a Transport company kept diesel on their site in a diesel storage tank. The tank leaked, causing a spill of 20,000 litres of diesel. This flowed into a stream and contaminated the water supply for a nearby township. As a result the transport company was prosecuted by the regional council under the resource management act and also under the hazardous substances and new organisms act.
After some serious negotations between the lawyers and the reginoal council, the charge of permitting the discahrge was dropped in exchange for a guilty plea for discharging contamination into a water source. A discharge without conviction was secured for charges under the health and saftey at work act. The transport company admitted liability for the remaining charges including the charge of failing to contain a hazardous substance, and was fined $ 240,000 under the resource management act and $ 60,000 under the hazardous substances and new organisms act.
The fines were paid by the insurance company and the defence costs toatling $ 125,000.
Fair Trading Act
A national retain chain was investigated by the commerce commission for its sales practices. Allegations were made that there had been misleading conduct in relation to goods, and false and misleading conduct in relation to goods, and false and misleading conduct in relation to the price of goods. The commerce Commission ultimately laid 14 charges under section 10 of the fair trading act and sought a total fine of $1.2m to $ 1.5m.
The charges relate to ' Was'/ ' Now' pricing, half price advertising, recommended retail price, and clearnace representations. Following negotiations between the lawyers and the commerce commision, the clothing chain admitted liability and a total fine of $ 800,000 was imposed. The fine was paid by the insurance company along with the legal defence cost of $ 70,000.
Health & Safety at Work Act
A Ferry Service operator was on a journey to a local island, when they turned sharply and hit a wave, causing several passengers to suffer injuries including fractures. Charges were laid under the health & safety at work act against both the ferry operator and the skipper.
Initially a not guilty pleas was entered to the charges. However following negotiations between lawyers the chargers were amended and an agreed summary of facts was presented to the court and ferry company admitted liabaility. The court awarded the four seriously injured passengers reparation totalling $ 78, 000, which was paid by their insurance company. The court imposed a fine of $35,000 which is unable to be covered by INsurance. However defence costs of $ 50,000 were paid by the insurance company.
Are you adequately protected?
Contact one of our advisors to help you arrange statutory liability for you and your company, protection for the unforeseen events.