Can I get insurance for breaching H&S law?

Despite employers’ best efforts to keep everyone safe on site, sometimes accidents happen. Builtin outlines what type of insurance could help you in such an instance.

Enforcement actions in the construction industry for inadequate height protection, which range from written warnings to prohibition notices to penalties and prosecution, have risen nearly 500% in the past three years. However, prosecutions have fallen 90%.* This is largely due to the “falls from height” campaign and more proactive action by inspectors. Unfortunately, construction is still in New Zealand’s top five for the highest number of workplace fatalities.

The vast majority of builders we deal with recognise the importance of good health and safety practices. However, most also subscribe to one or more of the following views:

• Regulation is over the top.
• Compliance costs are a heavy burden on a small business.
• There’s no personal responsibility anymore.

Whether you agree with the new regulations or not, the reality for everyone is that ensuring workplaces
are safe is non -negotiable. Unfortunately, despite the best intentions of employers, things sometimes happen that are beyond their control. If an injury occurs and a WorkSafe NZ investigation determines that it could have been prevented, you could face a fine and/or prosecution. Under the current law, workplace bullying (discussed on Page 14) is also considered a hazard, and failure to prevent it could be a breach of the law.

New legislation has recently been introduced that is expected to replace the Health & Safety in Employment Act with the Health & Safety at Work Act later this year. Among other things, this will:

• Increase penalties.
• Clarify that your responsibility is not just for your employees, but also for sub-contractors, employees of sub-contractors, hired labour, apprentices, workers on trial and volunteers.
• Highlight that you’re also responsible for them wherever they go when they are at work – for example, if they need to drive down to the merchant to pick up some materials.
• Put more onus and legal requirements on managers and company directors to manage risks and keep their workers safe.

Although the law specifically states that you can’t insure against fines under health and safety legislation, you are able to get insurance for the legal costs of defending an action and for reparation payments that may be awarded.

“Whether you agree with the new regulations or not, the reality for everyone is that ensuring workplaces are safe is non -negotiable

Statutory Liability Insurance

Known as statutory liability insurance, it provides protection for:

• The legal defence costs associated with breaches of most legislation, including the Building Act, Consumer Guarantees Act, Fair Trading Act, Resource Management Act, Health & Safety in Employment Act and others (but excluding criminal and tax statutes).
• The costs of an investigation or inquiry.
• Fines or penalties you may be required to pay under these acts (except for health and safety fines).

In addition to legal and investigative costs, examples of fines you may be exposed to include:

• Building without a consent when required – maximum fine $200,000.
• Complaint to the Building Practitioners Board – maximum fine $10,000.
• Breaching the Resource Management Act – maximum fine $600,000, plus $10,000 per day.

And new fines are regularly being introduced, such as:

• Building without a written contract when required – maximum fine still to be confirmed.
• Failure to supply a pre-contract declaration – maximum fine still to be confirmed.

As we become more regulated ( let’s face it, this is a one-way train) and enforcement increases, it’s worth thinking about having insurance to cover this risk.

“Although the law specifically states that you can’t insure against fines under health and safety legislation, you are able to get insurance for the legal costs of defending an action, and for reparation payments that may be awarded

About Builtin New Zealand

Builtin New Zealand is a specialist in construction liability insurance, with policies tailored to meet the needs of builders & tradespeople. For more information visit www.builtin.co.nz/Insurance, email Ben Rickard at ben@builtin.co.nz or call him on (07) 579 6259 or 0275 212 014.

*Otago Daily Times, OIA request to WorkSafe NZ