At Wayne Grayson & Associates we think that the more trade businesses are informed about how their insurance works, the better their experience will be.
Whatever trade you are in, you probably have a unique set of skills, jobs, and risks. Similarly, your insurance needs are unique to your situation.
But if you, or your trade business, unintentionally breached a New Zealand Act, would you be covered?
Even without realising, you could still be legally and financially liable for an error committed by you, your trade business, or your employees.
How can a business stay protected?
The best way that a trade business can protect itself against statutory liability is to develop a risk management plan that:
- Assesses all the relevant laws that apply to the business
- Outlines the actions required in each case
- Implements the appropriate procedures to ensure compliance.
Prevention and education are also important factors in workplace health and safety and your risk management plan should include involve employee training in relation to risk and the development of safety-related policies and procedures.
A risk management plan is the best protection a trade business can have to reduce the risk of being held accountable for statutory liability.
What is Statutory Liability Insurance?
Statutory Liability Insurance also provides access to specialist legal assistance and expert advice if you, or your business, are being prosecuted for breaching an Act. It covers you, your trade business, and your employees for reparations and the cost to defend prosecutions.
It can also cover investigations by the Commerce Commission or investigations of workplace injuries.
The policy does not cover employee contract claims, police prosecutions or IRD proceedings and does not cover reckless breach or deliberate disregard of statutory requirements.
What should trade businesses be aware of?
There are many statutes that can apply to your trade, some are even trade specific, but all trades will be liable for breaching the following:
- Health and Safety Act
Whilst we cannot legally insure against fines and penalties for this Act, the policy will defend you if you unintentionally breach it. There are many stories of trade businesses who have been investigated because of someone being injured on a worksite.
- Fair Trade Act
This Act relates to what you say about your products or services and is there to protect your customers from misleading and deceptive conduct generally, unsubstantiated claims, false representations, unfair practices, and unfair contract terms.
- Consumer Guarantees Act
This Act provides an obligation that services will be performed with reasonable care and skill, fit for the particular purpose they were supplied for, completed within a reasonable time and for a reasonable price.
Do I need Statutory Liability Insurance?
Any trade business operating in New Zealand needs statutory liability cover. But it is not a ‘get out of jail free’ card, the key definition for Statutory Liability Insurance is ‘unintentional’.
It is also worth bearing in mind that Statutory Liability Insurance won’t cover any work you have already completed if you did not have this cover already when you finished the job. If a past customer complains about a job that was finished before the policy was taken out and it relates to an insurable Act, you won’t be able to use the insurance to cover legal defence costs.
The scope of Statutory Liability Insurance can be so far reaching that there are few limits to what it covers. It’s far more than just an insurance that covers legal defence costs, but a policy that no trade business can afford to be without.
How can we help?
At Wayne Grayson & Associates, we believe an informed insurance decision is the right one. Whether you’re after business or personal insurance, our expert brokers will ensure your insurance is the right fit for you.
We offer Statutory Liability Insurance that protects you, your trade business, and your employees against unintentional breaches of New Zealand law that result in prosecution.
Contact one of our brokers for advice on the best liability solution to suit your organisation.