Under the Building Act builders have a "duty of care" to build something that is "fit for purpose". Duty of care is also an established principle in cases of negligence. A duty of care can be owed by:
Public liability insurance only covers claims for accidental damage to property (or in some cases injury). It does not cover you if the claim relates to an event where there isn't damage or loss of use, but there is some kind of a financial cost to someone.
Errors and Omissions (E&O) is Professional Indemnity insurance for builders and project managers. It will pay your legal bills if you or your company are held responsible for a mistake (it could even be a mistake made by a sub-contractor working for you) that has caused someone financial loss.
The policy CBA recommends, from Builtin New Zealand, has been specially designed for building contractors and project managers.
In a recent case a builder was named as a defendant in a leaky homes case, even though all he had done was correctly repair a leaky window in a property that he hadn't even built. His legal bills amounted to $40,000, just to be removed from the case.
Cases that are resolved through the Weathertight Homes Resolution Service (WHRS) are generally resulting in 80% of the liability (and cost) being apportioned to the builder! In most cases the builder doesn't have insurance to cover this (while the engineers, architects and surveyors will have Professional Indemnity cover), so the cost comes straight out of their pocket.
Give us a call for more information or to request an E&O quote, or register your interest here and we'll get back to you.
This covers your liability for accidental damage to or loss of another person's property. While resultant damage is covered, damage directly caused by faulty workmanship is normally excluded, but can be added back in with CBA. The policy we recommend also automatically includes cover for the property you're working on and has an automatic extension to cover the cost of defending LBP complaints.
HEALTH & SAFETY LIABILITY
While you cannot insure for health & safety fines, a statutory liability policy will cover your legal defense costs if you're prosecuted for a breach of health & safety legislation. It will also pay the reparations awarded by a judge to the injured person. Statutory liability will cover fines from breaches of other legislation, such as the Building Act, Resource Management Act and the Fair Trading Act.