General Liability. Liability

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As the largest Liability underwriter in New Zealand, we have the expertise and experience to meet the needs of your business.

QBE INSURANCE (INTERNATIONAL) LTD Quay Tower, 29 Customs Street West, PO Box 44, Auckland, NZ.

Telephone : 0064 9 366 9920 Facsimile: 0064 9 366 9930 www.qbe.co.nz

General Liability

Every business in New Zealand owes a duty of care to its customers and to the public at large. If a breach of this duty results in damage to third party property or injury, you could be held legally liable. With claims for compensation and the cost of defence increasing, the effect can be financially crippling.

Property Damage

You can be held legally liable for damage to someone's personal items or to commercial property caused by your business activities or products. The vast majority of General Liability claims paid by QBE each year arise from damage to third party property and the consequent losses.

Personal Injury

Anyone in New Zealand who is injured, and whose injury falls outside the scope of ACC, retains their right to sue if the injury can be attributed to you. Also, exemplary damages actions are still available to people whose injury is not catered for under ACC.

If you export products, or operate overseas, you are especially vulnerable. The trend in Australia, North America, and Europe is for more frequent legal action. Also settlements of awards for damages and defence costs are much higher than in New Zealand.

The QBE Solution

QBE’s General Liability policy combines public and products liability and is designed to help protect your business regardless of whether a claim arises from property damage or personal injury. It can pay for your defence costs, plus any settlements or damages that might be awarded against you.

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Our experience means we can handle the most complex marine underwriting, claims management and settlement.

QBE INSURANCE (INTERNATIONAL) LTD A Member of the QBE Insurance Group - Incorporated in N.S.W., Australia. A.B.N. 11 000 000 948

Case Studies

While excavating a new site a construction company cut through a power cable which supplied a supermarket. With no electricity and a darkened interior, the supermarket had to close for the day. The contractor’s General Liability policy paid out the cost of repair plus the supermarket’s claim for damaged frozen goods and loss of profits.

In a rafting trip that went tragically wrong a man witnessed his wife drown. He suffered mental trauma and successfully sued the rafting company for general damages, special damages and exemplary damages.

An electronics company regularly borrowed specialist equipment from a supplier. While on loan it was stolen from one of the company cars and because it was in their ’care custody and control’ the company was liable for its replacement. It cost them $90,000.

A fertiliser manufacturer was asked to supply a particular compost by a horticulturalist looking to nurture a specialised crop. The wrong compost was provided and burnt the young seedlings. As a result the entire crop was lost and with it that year’s projected income. The horticulturist’s claim for the lost crop exceeded $200,000. • Costs and Expenses

• Business Advice or Service • Forest & Rural Fires Act • Landlord’s Liability • Legal Costs & Expenses • Mechanical Plant Liability • Product Withdrawal Costs

• Property in Care, Custody or Control • Punitive or Exemplary Damages • Tenant’s Liability

• Damage to Underground Services

• Vehicle and Watercraft Service and Repair Liability • Vibration and Removal of Support

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Statutory Liability

Every business has a responsibility to protect its employees, customers, the general public and the environment from harm. Some of these responsibilities lie in common law but many are imposed through Acts of Parliament. Your business can be held responsible and prosecuted for breaches of these Acts. Penalties can be imposed on employees and individual directors as well as the business itself.

Keeping up to date with new, reformed or amended Acts can be difficult and ignorance of the law is no defence. As a large insurer of Statutory Liability business, QBE has many years experience in handling claims involving breaches of not only the major Acts affecting New Zealand businesses, such as Health and Safety, Resource Management, Fair Trading and Commerce Acts, but also the less frequent breaches of laws such as tha Historic Places Act, Medicines Act and Maritime Acts.

The QBE Statutory Liability policy helps protect the company, its trustees, directors, officers, employees, partners or sole traders if they unintentionally break the law and face a criminal conviction. It covers:

• reasonable defence costs • witness and investigation costs • most fines and court costs

• any solicitor’s costs a court orders you to pay

• reparations awarded under health and safety legislation.

Those New Zealand laws not covered by this policy are: Inland Revenue prosecutions, Arms Act 1983, Aviation Crimes Act 1972, Crimes Act 1961, Proceeds of Crimes Act 1991, Summary Offences Act 1981, Transport Act 1962 and Transport (Vehicle and Driver registration and Licensing) Act 1986.

Case Studies

A sawmill employee’s leg was severely crushed and later amputated after it was injured in uncovered machinery. While fines totalling $5,000 were awarded, the sawmill owner was ordered to pay reparations of $65,000 to the injured employee as well as pay additional legal costs of $20,000. While the fines are excluded under insurance by law, the significant reparations and legal costs were paid under the sawmill owner’s Statutory Liability policy.

An earthmoving contractor constructed a groundwater retention pond but the pond wall failed and sediment from the earthworks ran into a nearby stream. The contractor was prosecuted under the Resource Management Act for polluting even though the pond was constructed to the required standard.

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Employers Liability

While ACC covers most accidents at work, employees can still sue for work related illnesses that ACC doesn’t cover. This includes:

• Mental injury or stress not accompanied by any physical injury

• Nervous shock or fright not accompanied by any physical injury (this may result in serious illness such as heart attacks or strokes)

• Disease brought on slowly over time. For example, chemical poisoning, exposure to the elements or extremes of temperature

The QBE Employers Liability policy helps protect your business against civil actions by employees for injuries not covered by ACC and for any exemplary damages awarded. It covers:

• defence costs • settlements and awards

• any damages awarded by the court, including exemplary damages

Case Study

An employee of a pest control contractor developed health problems, including nausea and skin disorders due to prolonged exposure to chemicals used in fumigating. His claim was declined by ACC. The man took legal action against his employer and their Employers Liability policy paid defence costs and a $42,000 award of damages.

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Directors and Officers Liability

As a director in today’s increasingly litigious environment you can be held responsible for your own mistakes as well as those of your company and its employees. With increased regulation, greater scrutiny by shareholders and media, and the courts insisting on stronger corporate governance, the pressures of being a director have perhaps never been greater. Many directors are now demanding protection not only from the company but also from their insurance company.

The QBE Directors and Officers Liability policy has been designed to help protect your business and your personal assets by combining direct independent protection with company reimbursement. The policy provides coverage for wrongful acts arising from your position as a company director or officer. In addition advancement of defence costs can be provided for civil proceedings as well as for successfully defended crominal proceedings. The policy has the following standard extensions:

• run off cover / change of ownership • pollution legal costs

• trustees liability

• past, present and new subsidiaries • outside directorships

• spousal liability

• severability and non-imputation • late notification

In addition there are the following optional extensions available: • prospectus liability

• extended reporting period

• USA / Canada jurisdiction or wherever the company operates • outside directorships.

Case Study

A company decided to issue its shares via a prospectus on a recognised stock exchange. After the accounts of the company were published 12 months later it was found that some of the information provided by the directors was false and misleading. The shareholders got together to bring a class action. The action was settled out of court but the cost ran into millions of dollars.

• compensation for court attendance • advancement of defence costs • continuous cover

• health and safety defence costs • innocent non-disclosure

• official investigation and enquiries • preservation of indemnity

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Specialist Policies

Association Liability

Most associations and charities provide services and advice to their members or the general public and like any professional they can be sued for doing so negligently. The QBE Association Liability policy offers protection to an association against liability which it may incur through the conduct of its activities and in the capacity as a director or an officer of the association. Designed with the laws governing trusts and associations in mind you can be covered for defence costs, settlements and any damages that may be awarded.

Trustees Liability

The law of trusts is very complex. The trustees must follow a trust deed, which stipulates what a trustee can and cannot do. The purpose of the policy is to ensure that if the trustee is sued by a beneficiary, then the insurance policy will respond on defence costs and or settlement. This also protects the assets of the trust from being reduced by legal costs.

Directors and Officers Personal Liability

The QBE Directors and Officers Personal Liability policy can work either as an alternative to company purchased cover or as an extra level of security above that. It is also useful if you serve on more than one board as it gives consistent protection across all appointments notified to us, including trusteeships and directorships.

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Professional Indemnity

Any person offering advice or service based on expert knowledge for which they receive a fee or have a professional duty requires Professional Indemnity insurance. This broadens the traditional category of professional from the lawyer or accountant to include such diverse service providers as recruitment consultants, project managers, mortgage and insurance brokers, IT developers, real estate agents and many other occupations.

Any professional giving advice can be held accountable for the outcome and in today’s business environment with increased media and shareholder scrutiny, changing regulations and a more litigious society the likelihood of legal action is greater than ever before. The costs of defending a claim can be financially crippling, whether you win or lose, and the damage to your reputation and business can affect your future earnings potential. It is because of this that professionals are actively seeking out Professional Indemnity insurance as a way of protecting their position.

With QBE Professional Indemnity insurance you are covered for legal costs, settlements and court awards and have the following automatic extensions as standard in the policy:

• defamation

• breach of fiduciary duty • loss of documents

• breaches of the Fair Trading Act • breach of contract

In addition with a QBE Professional Indemnity policy you have access to an established and experienced specialist claims team who understand that an allegation of professional negligence can seriously harm your business. They will negotiate settlements in consultation with you and, should you be sued, they can appoint some of the country’s best lawyers to help in your defence.

Case Study

An engineer designed a bridge for a dairy farm. The construction of the bridge was to encompass light traffic and livestock. The engineer designed the bridge and took into account earthquake and river factors, but not flood, as flooding had never been a problem in this area. A flood occurred and one of the supports was washed away. Extensive repairs were required and indemnity under the policy was sought.

Specialist Policies

I.T. Liability

I.T. is one of the few industries that deliver both a product and a service. As such there are particular exposures that companies operating in the IT industry face. QBE have developed the IT Liability policy to cover both your professional indemnity and your third party and property exposures.

Case Study

A software designer wrote a programme that managed stock control from the point of sale. After a few weeks it was discovered that the automatic purchase system was over ordering goods and the warehouse had to return thousands of dollars of unused stock. The client made a claim against the software designer for the costs of the mistake.

Medical Malpractice

The QBE Medical Malpractice policy helps protect as a medical professional or medical establishment against liability arising from the conduct of your practice or business.

• intellectual property • joint venture cover • previous business • outgoing principals

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Specialist Liability

QBE also offer a range of specialist liability products that include: • Employment Disputes

• Defamation • Legal Expenses

• Fidelity / Crime Cover / Bankers Bond / Computer Crime • Prospectus Liability

• Seedsmen’s Error and Omissions

This brochure does not provide full details of every aspect of cover, nor all exclusions or limitations that may apply. For full details please contact your local QBE office or insurance advisor for a copy of our policy wording.