Important changes to the Health & Safety Act 2015/16 are now in effect, altering how we should manage our risk. This affects everyone in business or other organisations, including self-employed and not-for-profits. So, what do these changes mean and how do you insure against the new risks?
The recent amendment to the Health and Safety Act changes who is responsible for a loss and also increases the fine associated to the loss. Change was required after Pike River, and as no-one was found accountable an amendment was needed to widen the scope of responsibility.
Change came into effect on the 1st April 2016, naming all PCBU (person conducting business or undertakings) as being liable.
What is a PCBU?
Anyone can be a PCBU, it simply means anyone conducting business whether it is for profit or not. This brings us to the relevance of this to you and your business. Both you and your business are deemed PCBU’s that can be held responsible for a loss, subject to the associated fines or the immediate court costs when defending liability claims.
Cole Murray recommend that all businesses include in their risk management and insurance portfolio a Statutory Liability insurance policy, and here’s why.
Consider this real life example from the trades industry
This recent claim that has been presented highlights the extent to which charges can be brought against you, and how a Statutory Liability policy protects your business.
The scenario was disastrous
The council contracted a local road maintenance firm to dig up a portion of the road to lay new cabling. The road maintenance firm hired the appropriate equipment and employed the relevant operator to complete the work needed. Whilst the digger was in operation, a member of the public entered the site and was struck by the digger and killed.
WorkSafe then conducted an investigation into the loss, holding the following people/entities liable for the loss:
- The digger operator
- The training facility that trained the digger operator
- The hire company that provided the digger
- The local council, querying the conditions of the area that was being worked upon
- The road maintenance firm, querying their Health and Safety procedures
- All associated Directors and Officers of any of the above entities
All of the above are PCBU’s and needed to defend themselves in court.
So, how does a Statutory Liability insurance policy protect you?
A Statutory Liability policy would in the first instance provide advanced defence costs (allowing for immediate professional representation and court costs). Not only this, your insurer would be involved to minimise all costs that may be brought upon you.
That may be the end of your involvement. However, if you did not have the cover, you would then need to pay for your professional costs for a loss that was not of your doing.
If however you were charged and convicted, your Statutory Liability policy would then also pay reparation for the loss, and in some cases the fine, dependent on the Government Act.
The above scenario shows you do not have to be directly involved in the loss to be held accountable.
You simply need to have an association with the loss. A Statutory Liability policy can help defend you for associated defence costs and the like.
Statutory Liability covers you for a breach of certain government acts such as the Health and Safety Act, Resource Management Act, Consumer Guarantee Act to name a few. A Statutory Liability Policy will provide cover for most defence costs and reparation fines.
Want to manage your risk?
Drop our Business Insurance Adviser Bonnie a line – she’ll be happy to discuss this change and help you get the adequate cover required.