What is Statutory Liability?

Companies in New Zealand across all industries have a number of statues with which they need to comply. Breaching one of these statues, whether intentionally or accidently, and whether you know a breach has occurred or not, could result in nasty consequences. These can include and investigation or prosecution by a regulatory body that could wind up in a fine, penalty or even jail time. You could also find yourself paying a pretty penny in defense costs, representation costs and even reparations.

Members of your company that could be held liable for statutory breaches include directors, executives and even employees.

For instance, the new Health and Safety at Work Act poses Statutory Liability exposure risk to Kiwi small businesses from many different industries. Other acts from which a Statuatory Liability claim can commonly arise include:

• Resource Management Act
• Building Act
• Fair Trading Act
• Resource management Act
• Privacy Act
• Consumer Guarantees Act

Like any insurance policy, a Statutory Liability policy will have it’s own exclusions. Some specific Acts of Parliament are excluded and this can be found in our policy wording. Keep reading below to find out some other situations that are not covered, or that can be covered by other insurance products.

Statutory Liability*

Fortunately, there is an insurance product designed to protect you from the financial and legal consequences of a Statutory breach. Statutory Liability insurance covers the company, senior management and employees for allegations of wrongful breaches of key legislation in the course of the Insured’s business. The policy will meet fines and penalties payable in specified circumstances and related legal expenses

What’s typically covered?
• Costs and expenses incurred from official investigations and inquiries
• Fines and penalties as detailed in the policy wording
• Pollution Liability defense cost
• It can also cover investigations by the Commerce Commission and investigations of workplace injuries

What’s typically NOT covered?

Loss arising from any claim against you for:

• Civil liability as a result of compensation claims by third parties
• Wrongful breach relating to the regulation of air, marine or motor traffic
• Asbestos
• Fines and penalties caused by:
  • Dishonest, wilful, intentional or deliberate wrongful breach
  • Wilful, intentional or deliberate failure to comply with lawful notice, direction, enforcement action or proceeding under any Act
  • Your gross negligence or recklessness
  • Requirement to pay taxes, rates, duties, levies, charges, fees or any other revenue or impost
• Fraud and dishonesty
• Joint ventures
• Pollutants (other than those set out in the policy wording)
• Prior or pending claims
• Property damage
• Criminal offences

Did you know?

Statutory Liability generally insures the cost of fines and penalties, as well as pollution liability defence costs.

Things to consider

Is your business at risk of inadvertently breaching any Acts administered by Commonwealth, State or Local Government? Could you afford to pay legal costs, fines, and other costs in the event that you are investigated?