What we cover
You may already have insurance to safeguard your business’ vehicles, buildings and equipment, but have you considered the protection you might need for damage and loss unintentionally caused by your business to others or their property?
Everyone makes mistakes, which have potential to create big problems. This may take the shape of claims for financial loss or property damage or injury. Whether you’re at fault or not, you could face expensive, time-consuming legal action.
Liability insurance can cover your legal expenses, fines, reparations, and damages imposed by a Court, or settlements negotiated to bring matters to conclusion. In situations where legal expertise is needed, we have a highly experienced team to help manage your claim, and a stable of specialist law firms to protect your interests. Legal experts will manage interactions with other parties and navigate the court proceedings, leaving you free to keep running your business.
Liability issues aren’t rare. In 2022 New Zealand businesses received almost $150m in liability cover claims to help pay their legal costs, fines and damages.1
1Reference: Insurance Council of New Zealand
Table: “Liability Professional & Defamation, Directors & Officers and Public Product & Other 12 months to September”
Liability insurance can be complex, so we’ve combined several types of liability cover into one package: Liability One. It’s the simple solution for your business’ liability needs as it covers many common situations facing small and medium sized businesses.
Public Liability insurance (also known as Broadform or General Liability insurance) can provide cover if you, your employees or your products accidentally injure someone or cause damage to other peoples’ property.
Public Liability insurance can help pay for your legal costs and damages if you or your employees are found to have acted negligently. For many businesses, it’s the core of their liability risk management as it can respond even if they’re not at fault and cover legal costs to defend the claim, which can be substantial.
A few weeks after our insured, a residential electrician, installed some recessed lights, a fire broke out and caused extensive damage. The insurer representing the homeowners filed a claim of $155,000 alleging a loose neutral wire within the light fitting was the cause of the fire.
We engaged a law firm to act on the insured’s behalf, who investigated the claim and appointed an electrical engineer to assess the cause of the fire. The engineer confirmed the fire was caused by the loose wiring from the insured’s work.
The law firm negotiated with the claimant, reaching a settlement of just under $100,000. The insured’s Public Liability insurance covered the settlement and the $50,000 in defence costs.
Statutory Liability insurance covers a range of fines and defence costs if your business is prosecuted for an unintentional breach of certain New Zealand Statutes.
This could be the Fair Trading Act 1986, the Resource Management Act 1991, the Hazardous Substances and New Organisms Act 1996 or the Building Act 2004, amongst others. We also cover breaches of the Health & Safety at Work Act 2015, although it prohibits us covering any fines imposed as a result of the breach.
Statutory Liability cover is often activated after a workplace death or serious injury, which commonly leads to a WorkSafe investigation, and potentially prosecution. It can also help with unintentional breaches of an Act that don’t directly lead to harm, but still result in prosecution.
The insured, a logging business, took on a contract to harvest trees from a local council-owned forest.
The local council brought two charges against our insured for breaching the Resource Management Act 1991. The first for discharging a contaminant onto or into land in circumstances that may result in the contaminant entering water, and the second for operating in a way that contravened the resource consent.
We instructed a law firm to take over the legal defence and act for the insured. The law firm investigated the claim and found the insured to have carried out work in accordance with the resource consent. Our law firm then negotiated with the prosecution to withdraw charges against the insured.
The legal costs incurred of $130,000 were covered under the insured’s Statutory Liability policy.
A contractor of our insured, a residential builder, removed safety netting to enable roof trusses to be lifted up for installation rather than wait for the recommended scaffolding, which had been organised to arrive.
One of the contractors, whilst managing this lift fell from height causing severe spinal injury.
The fall triggered a WorkSafe investigation. We engaged a specialist law firm to act on the insured’s behalf and undertake a preliminary investigation, negotiate with WorkSafe, review the disclosure material, and attend the hearing.
WorkSafe filed charges under the Health & Safety at Work Act 2015, and the court ordered reparations of $150,000 and imposed a fine of $12,500.
Fines imposed by a Court under the Health & Safety at Work Act 2015 cannot be covered by insurance, however the insured’s Statutory Liability policy covered the $150,000 reparation and almost $60,000 in legal costs incurred.
While on the job, employees may face the possibility of physical or mental injury. ACC covers the medical costs for most personal injuries, but it doesn’t cover stress, stress-related conditions and some long-term conditions.
If these situations lead to your business being taken to court, you could potentially have to pay compensation or even punitive damages. Where a business has employees, Employer’s Liability insurance can provide cover when ACC does not, as well as associated defence costs.
Some fraud is committed by strangers, but the sad truth is that it’s often a highly trusted employee or someone related to an employee, especially in a small business. This can result in substantial and irrecoverable losses for your business.
A Crime policy helps with the costs of recovering losses from fraud committed by an employee, or compensating you if recovery is not possible. It includes losses perpetrated by third parties as well.
If your business provides professional advice or services, there’s the potential your recommendations or advice could prove unsuitable. If a client suffers financial loss as a result, they might consider legal action to seek compensation. Even if you are not at fault, your legal defence can be expensive and time-consuming.
A Professional Indemnity policy protects against an allegation of a breach of your professional duty. It can cover your legal expenses and compensation awarded against you.
Professional Indemnity policies are often suitable for lawyers, accountants, engineers, architects, real-estate agents, financial advisors, and management consultants.
Business directors and senior leaders face the challenge of making difficult and complex decisions in the course of running a business. These decisions can result in adverse outcomes for employees, customers, or shareholders, and could potentially lead to legal action against a director personally.
Directors and Officers Liability insurance helps safeguard a director’s personal assets in such situations. The policy covers legal liability to pay damages, as well as legal expenses incurred in defending the claim.
Trustees Liability insurance is designed to help protect those who manage trusts on behalf of others.
Trustees Liability insurance covers you and your fellow trustees from any claims of a breach of fiduciary duties or mismanagement. It covers your legal liability to pay damages, as well as legal expenses in defending a claim.
IT Liability insurance combines professional indemnity and public liability cover for businesses in the technology sector.
If your business develops or maintains software, provides IT advice, data services or equipment to other organisations, there’s potential for something going wrong. If it does, and it causes damage or loss to your clients’ business operations, they might consider legal action for compensation.
Our IT Liability policy protects you from damages arising from issues with your advice, software, services, employees or equipment. It provides cover for legal defence costs, and for compensation or damages awarded by the courts, leaving you free to keep running your business.
Associations Liability insurance is designed to help protect the officers and volunteers of incorporated societies and community associations.
Under the Incorporated Societies Act 2022*, officers of the society or association have a duty to operate in the best interest of the society and have special requirements for liability.
NZI’s Associations Liability insurance combines Directors and Officers Liability insurance and Professional Indemnity insurance to help protect the individuals acting for the society.
If someone suffers loss as a result of the association’s activities or advice, they could consider legal action to seek compensation. This policy can help protect officers from the costs of mounting a legal defence, as well as damages awarded while carrying out their duties on the committee.
*Existing incorporated societies have until 5 April 2026 to register under the Incorporated Societies Act 2022.
Body corporate committees have to make many decisions about maintenance, services and inter-tenant issues, which can often become contentious. Sometimes, decisions such as deferring maintenance can even result in damage to the property’s shared facilities. These issues have potential to end up in court with claims for damages against committee members, leaving them personally liable for damages and any defence costs.
Body Corporate Liability insurance covers committee members’ legal costs and protects them from having to pay compensation for damages from their personal assets.