The new Health and Safety at Work Act 2015 casts a wide net and in my opinion, all business owners should at a bare minimum have Public Liability, Statutory Liability and – where the company has staff – Employers Liability cover.
What is public liability insurance?
Public liability policies protect businesses (and other bodies like sports clubs) from claims for compensation when unexpected, and unintended personal injury or property damage arises out of the business’s activities.
What is statutory liability insurance?
Statutory liability policies protect people or businesses (and other bodies like sports clubs) when they unintentionally breach New Zealand Acts of Parliament and covers things like defence costs, legally allowable fine and reparations – for example, those arising from breaches of the HSWA 2015. Conditions certainly apply of course and not all elements may be covered
What is Employer’s liability insurance?
It’s true that ACC does cover a lot of costs arising from workplace injuries or work-related illnesses, but there are some things that ACC won’t cover. An employer will need to have covered in place to protect the business from claims for work-related accidents that ACC doesn’t cover.
When it comes to trades people, the limit of indemnity (the sum insured) is very dependent on a few factors:
1. Do you work in the commercial/business sector or the domestic/residential market?
The assumption is that how much you’re insured for will be higher if you work in the commercial/business sector. Although, for those working in the higher value residential sector, a higher limit of indemnity should be considered!
2. Are there any contractual requirements that suppliers/clients have of the tradesperson?
For example, a tradesperson may need $5million NZD public liability cover, but they may want to do work for a city council or any government department. In that case, the will find that the contractual requirement may differ from what they have.
Some major corporates require $10 million NZD public liability cover from their contractors.
3. What are the risks associated with your trade?
The services you offer – and in what context – could also play a role in determining the limit of liability cover that you may need.
For example, if you are a gardener or landscaper who does work for the council in parks and gardens, you may be required to have the standard $250,000 limit for Forest & Rural Fire Acts cover under the public liability policy.
However, a gardener or landscaper who works in rural areas, may have a requirement to have Forest & Rural Fires Act cover of e.g. $500k to $1mil.
4. What tools and equipment do you use?
Tradespeople may have also had insurance needs when it comes to the equipment and tools of the trade, whether that equipment travels with you to the site (and not to forget the vehicle that transports the tools and equipment).
5. Do you sub-contract specialist roles to other trades?
Some tradespeople who are Licenced Building Practitioners (LBP’s) should also consider additional cover to protect themselves in the role of a PCBU (person conducting a business or undertaking).
6. Are there any legal or specific requirements of your profession?
Some liability insurance policies have extra ‘tick-boxes’ or benefits applicable to certain occupations. For example, an additional cover is required by those in the motor trade who are licenced to issue a Warrant of Fitness.