Liability Insurance provides protection for the insured from third party claims arising from the insured's negligence causing loss or damage to a third party's property, business, reputation or a liability for an unintentional breach of a Statute or a professional mistake when providing advice.
Liability Insurance is available in a number of forms covering specific Liability risks.
Things to note about liability insurance
Liability Policy Claims Triggers - there are two differences:
- "Claims made" policies such as Professional Indemnity and Directors' and Officers' Liability policies operate on the basis that cover is provided when a claim is made and notified within the period of insurance regardless of when the claim originally occurred.
- "Occurrence" policies, such as General Public & Products, Statutory Liability, Employment Practices Liability and Bailees' Liability, provide cover when the event that gives rise to the liability claims occurs within the current period of insurance.
General Public and Products Liability - ['Occurrence' trigger]
The most basic form of Liability Insurance is Public Liability that provides legal liability protection from damage to third party property or bodily injury. This type of cover is important for anybody who occupies or leases property in connection with their business, and/or provides a service away from their premises, such as a decorator, painter, motor mechanic, electrician, plumber.
Products Liability Cover is important for anybody supplying products such as a retailer, importer/exporter or manufacturer. Cover includes defence costs which are usually in addition to the limit of indemnity.
Employers' Liability - ['Claims made' trigger]
Provides cover for personal injury to any employee of the insured. This includes any obligation for which the insured may be held liable under the Injury Prevention, Rehabilitation and Compensation Act 2001, or any similar or amending legislation. Cover includes defence costs.
Statutory Liability - ['Claims made' trigger]
Provides legal defence protection and cover for fines for some breaches of Statute such as Resource Management Act, Financial Reporting Act, Building Act. Occupational Health and Safety legislation prevents parties from insuring for OSH fines. Cover includes defence costs.
Employment Practice Liability - ['Occurrence' trigger]
Provides protection for legal defence and court awarded settlements for employment law breaches. Cover includes defence costs.
Bailees' Liability - ['Occurrence' trigger]
Anyone who holds third party goods or property under their care custody and control has a Bailees' Liability exposure. Cover includes defence costs.
Professional Indemnity - ['Claims made' trigger]
Provides protection against liability costs arising from the provision of incorrect or faulty professional advice or design, as well as defamation. Cover includes defence costs.
Directors' and Officers' Liability - ['Claims made' trigger]
Provides protection for directors and officers for wrongful acts committed within their capacity as a director or an officer. Cover includes defence costs.
Designed specifically for trustees for cover under the above-mentioned policy categories.
These are just some of the liability insurance covers available. Terms and Conditions will vary. Policy wordings need to be read. Seek advice from your insurance adviser.