Today (4th April 2016), the Health & Safety At Work Act came into force. This legislation increases the responsibility of businesses, directors, managers and workers to manage health & safety in the workplace.
Alongside the new law, WorksafeNZ is increasing its enforcement activity, which could increase the potential for prosecution if a substantial breach is identified. Although the Health & Safety at Work Act specifically states that you can’t insure for health & safety fines, you are able to get insurance for the legal costs of defending yourself if you’re prosecuted for a breach of the law.
In addition to the new health & safety laws, the passing of the Sentencing Amendment Act 2014 has extended the ability of judges to award reparation to meet any shortfall in a victim’s ACC compensation. This will result in potentially larger reparations and more expensive defence costs. Before these changes an injured party may have faced a shortfall in what they received from ACC. Shortfalls can arise for a number of reasons:
Unfortunately, it’s a reality that sometimes, despite your best efforts, accidents can happen.
Insurance is available
Known as statutory liability insurance, it provides protection for:
We surveyed 549 CBA Insurances clients in September 2015. Here are the results.
92% of customers are satisfied with us (an increase of 2 points vs 2014)
100% of clients find us convenient to use (86% find us extremely or very convenient)
88% find we understand their business extremely or quite well
88% of our clients like us (half like us a great deal)
our premiums are comparable to other brokers (some are higher, some are lower but most are about the same)
Tailored policies and responsiveness are most important to our clients
92% find us extremely or quite responsive
99% of customers find us professional to deal with
We had Compliments from our clients (thanks guys!)
What a great friendly team at CBA.
Thanks to the team in CBA.
No. Happy with my dealings thank you.
Keep up the great service.
I had a claim several years ago and was most impressed with the way it was handled. From start to finish the claim was settled in a matter of days.
Great team and great to deal with.
Nil. Keep on doing what you do.
Always brilliant to deal with.
Keep up the good work.
Having a low staff turnover rate ensures that the team understand our business and continuity of that knowledge is with held. Staff are approachable, friendly and take action quickly.
All happy thank you very much....
we had some things to work on (we're working hard on them)
One person asked for less forms to fill in
One person asked for faster call backs
3 people had frustration with claims (including the actual insurer)
One person asked for a clearer breakdown of the cost to increase liability cover
And we had some great suggestions too
More detail about each policy
Annual reviews of cover
Regular updates on relevant topics
An online contract works quoting system (we have this!)
WHAT WOULD IT COST YOUR BUSINESS IF A HEAD CONTRACTOR YOU’RE WORKING FOR GOES BUST WITHOUT PAYING YOU?
The Stonewood Homes collapse is a timely wake up call for all building subcontractors to take out insurance to protect themselves from the cost of such an event.
Subcontractors Payment Guarantee cover was introduced to the market in the wake of the collapse of Hartner Construction in 2001. In February 2013 Mainzeal Construction collapsed, leaving subcontractors out of pocket to the tune of around $70m. In February and almost three years to the day since the collapse of Mainzeal, Stonewood Homes NZ, along with its Christchurch franchise, were placed into receivership, owing an estimated $15m to unsecured creditors, including hundreds of subcontracting firms.
“Are your subbies covered if another firm they’re working for collapses? Do them a favour and let them know about payment guarantee insurance.”
These large, high profile collapses are the tip of the iceberg and dozens of firms go bust every year, leaving their subcontractors unpaid for work done. Two other regional Stonewood franchises are currently in liquidation, along with at least a dozen other building companies nationwide. “It may seem counterintuitive but there’s as much risk of a business failing during the boom times as there is during a downturn, and Stonewood is a prime example.”
Subcontractors Payment Guarantee cover reimburses 75% of a subbie’s unpaid invoices in the event that their main contractor becomes insolvent. Limits of $25,000 and $50,000 are available.
“Are you covered if your principal contractor goes into liquidation?”
Although the policy doesn’t cover retentions, these will soon be given greater protection by changes to the Construction Contracts Act, and subcontractors can always opt to provide a bond in lieu of retentions.
Contact Gwenda or Rachael at CBA Insurances to find out more and get a quote.
It’s fair to say that when something goes wrong, how well your insurance responds can be the difference between a good result and a nightmare. Having represented many members when it comes to liability claims, we suggest a number of ways to ensure the process goes as smoothly as possible and the outcome, while perhaps not always the one you hoped for, is prompt and fair.
Liability claims are not black & white
Liability policies cover broadly defined risks such as “accidental damage”. It’s impossible to list all the scenarios where accidental damage could occur and certain, often broadly defined, situations are excluded also. This makes it hard to say whether a particular situation will be a claim without first investigating it. As a result there are grey areas, where something could be a claim depending on a person’s interpretation of the situation and the policy wording. This makes the assessment process critical.
A builder was installing insulation in a roof space when he accidentally put his foot through the ceiling. Is this a public liability claim? Answers at the end.
Understand what your policy covers in the first place
Probably the most common reason for dissatisfaction with the outcome of a liability claim is because the insured party has assumed the policy will cover something that it is not intended to. No-one expects you to be an expert in the wording of your insurance policy, but it is important that you do spend some time getting a handle on the cover it provides. Read the policy and speak to your insurer or broker when you take it out and again at renewal. That way, when something happens at least you’ll be in a better position to assess if it is prima facie (on the face of it) a valid claim or not.
An excavator preparing the site for a new house damages an underground cable, causing a power outage. Would this be covered by the contract works insurance?
Make sure you take due care
This is obvious, but a momentary assumption on site can backfire when it comes to a claim being accepted.
A builder putting up a heated towel rail puts a screw through a hidden water pipe. Is this accidental damage?
Do not admit liability
Even though it might be obvious to all involved that you were responsible for the damage, if you intend to make an insurance claim then the insurer (and ultimately the courts) decide who is responsible, you cannot make this call on their behalf. Do not promise that your insurer will sort it out, simply say that you will contact your insurance company.
Tell your insurance company ASAP
The quicker you put in a claim the faster it will be sorted out, and the less likely it is that other subsequent actions might jeopardise the claim. In some cases it may be faster for an owner to claim with their house insurer (or material damage insurer for commercial property), which may then seek to recover their costs from you (via your insurance). Either way, don’t delay making the call to your insurer.
Depending on the type of claim they will probably appoint an independent assessor to investigate the situation, determine liability and the likely cost and recommend a course of action.
Complete the claim form in full and with as much supporting evidence as you can
If the insurer has to come back to you for more detail this will inevitably result in delays. They will expect:
Claims assessors and loss adjustors are experts at sniffing out inconsistencies and if something doesn’t add up they’ll keep digging. The best approach is to answer their questions as fully as possible and allow them to make their decision based on all the facts.
A broker is on your side at claim time
If you have a broker you should expect them to help you prepare the claim and represent you to the insurer. This is where a good broker who is experienced in construction industry claims earns their money. If your claim falls into one of the grey areas of the policy then having an expert on board could be the difference between it being accepted or declined. If you deal directly with an insurer or through their agent, it will be up to you to argue the case. It’s not that insurers decline claims unfairly, in our experience this is not the case in the New Zealand insurance industry. However, when it comes to claims that fall into that grey area, and plenty of liability claims do, which way the decision falls could be down to the claims manager’s interpretation of both the events and the policy wording. That’s when you need someone with expertise, experience and relationship to argue the alternative point of view.
In a nutshell
Liability claims are often not straightforward, and liability policies open to interpretation. Don’t admit liability, get on to it straight away, cooperate with the assessor and supply information fully and frankly and ideally have someone with expertise on your side. This will increase your chances of a swift and successful outcome.
1. Maybe. It depends on your insurer’s wording and their interpretation of the incident. Was the ceiling the “property being worked on”? Was the house a new build and could therefore be considered “the builder’s product”? If the answer is yes to the above questions (in the insurer’s view) then, depending on the policy in place, a claim could be declined.
2. No. The underground services are “existing structures” and “third party property” and not part of the contract works. As such they will be outside of the cover under a contract works policy. They may however be covered by public liability insurance, under an “underground services” extension. In that case, to avoid jeopardising a potential claim, the policy may require that action to locate any existing cables and pipes be undertaken first.
3. That depends. Should a builder, who ought to know this was a possibility, have checked first? If he didn’t is it faulty workmanship? What you might consider to be an accident could be interpreted by a claims assessor as defective workmanship and subject to an exclusion or higher excess.