Statutory Liability

All organisations, irrespective of industry, are exposed to potential liability arising out of investigations or prosecutions by regulatory bodies for alleged breach of New Zealand statute. Statutory Liability policies cover liability arising out of unintentional breach of almost all New Zealand statutes. Common examples include:

• Resource Management Act
• Building Act
• Fair Trading Act
• Health & Safety in Employment Act (excluding fines)

While organisations commonly face a higher risk of prosecution, directors, executives and employees are also personally exposed with New Zealand courts having the ability to impose a range of penalties including fines and imprisonment for breaches. Statutory Liability insurance can indemnify organisations and individuals against the costs associated with an investigation or prosecution for unintentional breaches of statute. (The punishment for these breaches is a fine if convicted). Policies typically cover:

• Judgments (fines)
• Defence costs
• Reparations (Health & Safety in Employment Act only)
• Representation costs at official inquiries or complaints tribunals

It is not uncommon for offences alleging breach of statute to operate on a 'strict liability' basis, ie. intent does not need to be proved for a prosecution to be successful. Cover is designed to protect against the unexpected and not the results of wilful misconduct or ignorance of the law. As such, criminal allegations or liability arising from deliberate, wilful or reckless acts or omissions are not insured.