Exposure to Risk
All organisations have an exposure to claims for damages - as a result of injuries allegedly sustained by employees in their workplace. Even though there is Accident Compensation (“ACC”) legislation in place, there are a number of work-related injuries that ACC may not cover.
In those circumstances an employee may be able to sue an employer for compensatory damages. The types of injury can (or may) include:
- Occupational stress
- Heart attack or stroke as the result of mental effort or mental strain arising out of, and in the course of, employment
- Disease caused by gradual process – particularly where the employers obligation to provide a safe workplace has not been met
- Disease or infection caused by air conditioning systems
- Disease or infection caused by exposure to passive smoking
- Nervous shock caused by defective premises
In exceptional circumstances the law will also permit an employee to bring a civil action for punitive and exemplary damages against an employer for alleged workplace injuries.
Employers Liability insurance provides cover for claims made by employees against
employers for injuries or illness occurring in the workplace - that falls outside the scope of cover provided by ACC. Cover applies to New Zealand only.
Most Employers Liability insurance policies are written on a claims made and reported basis. This means that is the policy will only cover:
- Claims first made against the insured or
- Circumstances which could give rise to a claim which the insured first became aware of and that are reported to the insurer during the same policy period
Employers Liability insurance covers damages for claims from an employee sustaining personal injury in the course of their employment. It includes defence costs incurred in investigating and / or defending claims or proceedings by the employee.
As is the case with all insurance policies, Employers Liability insurance policies contain
exclusions. Whilst exclusions will vary from policy to policy typically most policies will exclude:
- Personal injury suffered by an employee to the extent that ACC provides cover
- Employees sustaining personal injuries arising out of wilfully intentional or deliberate conduct of the employer
- Claims involving or arising out of asbestos or asbestosis; and
- Claims arising out of terrorism
To discuss the benefits of this cover for you and your organisation please contact us.