Health and Safety Risks: Protect your business

Health and safety is a critical area of responsibility for all New Zealand businesses. Liability insurance can help protect your business and its employees against unintentional and costly health and safety risks.

WorkSafe New Zealand reported 34,668 workplace related injuries in 2021, resulting in the impacted individuals having more than a week away from work*. The industries with the highest numbers of injuries included manufacturing, construction, health care, transport and warehousing.

The potential liability exposure for businesses under the Health and Safety at Work Act 2015 (‘The Act’) is significant. Any accidental breaches of this Act can lead to investigations or prosecutions by the regulatory body, with potentially significant financial and legal consequences.

The main purpose the Act is to protect workers and other persons against harm to their health and safety by minimising risks arising from work. The primary changes to the Act meant that:

• Business owners, directors and officers can be held personally liable if they fail to exercise due diligence to ensure their business complies with their work health and safety obligations.
• A worker includes employee, contractor, labour hire, remote worker, apprentice, work experience and volunteers.
• A Person Conducting a Business or Undertaking (PCBU) cannot waive their responsibilities under the Act or assign them to other parties.

Benefits of Statutory Liability insurance

Statutory Liability insurance can protect the business, its directors, managers and employees from liability arising from a breach of New Zealand statues (including the Health and Safety at Work Act 2015**) by covering:

• Costs to defend prosecutions
• Insurable penalties or reparations incurred

Example where Statutory Liability insurance can protect your business

• An employee of a construction business is operating a forklift onsite when they crash and injure themselves and a colleague. It is found that the employee did not have the proper training to operate the forklift. The business would likely require legal assistance and could be liable for the injuries of the employees involved in the incident and any other damages under the Act.
• Statutory liability insurance would help to minimise the financial impact by covering the cost to defend prosecutions and the insurable reparations incurred. It is illegal to insure against fines under the Act however legal and defence costs are covered. Legal advice can help reduce the level of fines imposed through collating evidence supporting steps the business has taken to actively manage the risk.

Contact your broker to ensure you have the right liability insurance cover in place.

*WorkSafe New Zealand: https://data.worksafe.govt.nz/graph/summary/injuries_week_away

**Policy excludes cover for any fines charged in relation to the Health and Safety at Work Act 2015