LIABILITY INSURANCE

A range of Professional Liability products designed to meet the demands of professionals and businesses operating in today's dynamic and complex business environment.

COMMERCIAL CRIME INSURANCE

Past experience shows increased criminal activity and discovery rates during periods of economic uncertainty.

DIRECTORS AND OFFICERS LIABILITY INSURANCE

Directors and Officers Insurance protects an individual director or officer against legal costs and possible damages in defending allegations of wrongful acts in their capacity as a director or officer in the management of a company.

FINANCIAL INSTITUTIONS

We understand the complexities of investment management, the ever increasing regulatory environment and the potential exposure faced by an investment manager.

MANAGEMENT & LEGAL LIABILITY INSURANCE

Management and Legal Liability Insurance policy provides important coverage that organisations need in today’s challenging times.

PROFESSIONAL INDEMNITY

Professional Indemnity Insurance covers companies and staff if sued for an act, error or omission in relation to professional advice given, or decisions made.

SECURITY AND PRIVACY PROTECTION INSURANCE

Customers want to know they can trust companies.

Client Advisory: Directors & Officers (D&O) Insurance and Exposure to Other Parties (Including Members of Incorporated Societies)

Why D&O Insurance Is Essential

Recent legal developments and court decisions have made it clear: directors, officers, and committee members are increasingly exposed to personal liability for their actions and decisions. This is true not only for companies but also for incorporated societies, where officers may face claims from their own members. In this environment, a robust understanding of Directors & Officers (D&O) insurance—and the exposures it addresses—is vital.

Who Is at Risk?

D&O insurance is relevant for anyone in a governance or management role, including:

Company directors and officers (e.g., CEOs, CFOs, COOs, company secretaries)
Committee members and office holders of incorporated societies
Senior managers and those making significant decisions on behalf of the entity

These individuals can be held personally liable for breaches of duty to the company or society, as well as for damages to third parties—including shareholders, creditors, competitors, regulators, and, in the case of societies, their own members.

What Does D&O Insurance Cover?

D&O insurance is designed to protect against personal loss arising from claims made for wrongful acts in a management or governance role. Key areas of cover include:

Directors’/Officers’ Liability: Personal liability for claims made against directors, officers, or committee members for wrongful acts.
Entity Reimbursement: Cover for the company or society when it indemnifies directors or officers, as permitted by law.
Entity Cover: Some policies extend cover to the company or society itself, particularly for claims made directly against the entity (e.g., securities claims for companies).

Exposure to Other Parties—Including Members

Directors and officers can face claims from a wide range of parties, such as:

Shareholders or Members: For alleged mismanagement, breach of rules, or failure to act in the best interests of the entity.
Creditors: Especially in insolvency situations.
Competitors: For restrictive trade practices or anti-competitive behaviour.
Employees: For employment-related grievances.
Regulators: For breaches of statutory or regulatory duties.
Third Parties: For defamation, tortious acts, or other alleged wrongdoing.

For incorporated societies, a key risk is exposure to claims from their own members. These may involve disputes over governance, use of funds, or compliance with the society’s rules. Such claims can be complex and may not always be covered, depending on the policy wording—especially if the claim is considered an “internal dispute.”

Key Features and Exclusions to Consider

Not all D&O policies are the same. When reviewing your cover, pay particular attention to:

Capacity: Cover applies only when acting in an official capacity (not as a shareholder, member, or in a personal role).
Claims Made Basis: D&O policies generally cover claims made and notified during the policy period. Prompt notification is essential to preserve cover.
Exclusions: Common exclusions include fraud, dishonesty, criminal acts, and uninsurable losses (such as fines or penalties). Insolvency-related claims may also be excluded or limited, depending on policy wording.
Severability and Non-Imputation: Many policies protect innocent directors or officers if another insured breaches policy terms, but this can vary—especially for sole director/shareholder companies or small societies.
Defence Costs: Most modern policies provide separate limits for defence costs and liability, but this should be checked carefully.
Insured v Insured Exclusion: Some policies exclude claims brought by one insured against another (e.g., member v officer in a society). The scope of this exclusion can significantly affect cover for internal disputes.

Special Considerations for Incorporated Societies

Member v Officer Claims: D&O insurance can provide vital protection where members allege breaches of the society’s rules, mismanagement, or other wrongful acts by officers or committee members. However, the “insured v insured” exclusion may limit cover for these disputes—review your policy carefully.
Definition of Insured: Ensure the policy’s definition of “insured” includes all relevant office holders, committee members, and, where appropriate, volunteers.
Regulatory Changes: The Incorporated Societies Act 2022 introduces new compliance and governance requirements, increasing the potential for claims against officers. D&O insurance should be reviewed in light of these changes.
Internal Disputes: Many claims in societies arise from internal disagreements. Some policies may exclude these, so it is important to clarify the extent of cover for such scenarios.

Recent Legal Developments

Cases such as the Mainzeal decision have shown that courts are taking a strict approach to directors’ duties, particularly around insolvency and reckless trading. Directors and officers must actively manage risks and cannot rely on informal assurances or hope for future improvement. For societies, this means careful attention to financial management, compliance with rules, and transparent governance.

Policy Extensions and Enhancements

Many D&O policies offer valuable extensions, such as:

Continuous Cover: For circumstances that should have been notified under a prior policy.
Outside Directorships: Cover for directors or officers acting on outside boards as representatives of the insured entity.
Employment Practices Liability: Cover for employment-related claims.
Investigation Costs: Cover for legal costs arising from regulatory investigations or official inquiries.
New Subsidiaries or Branches: Automatic cover for newly acquired or created subsidiaries or branches, subject to conditions.

Practical Steps for Directors, Officers, and Committee Members

Review Your Policy: Understand the scope of cover, exclusions, and notification requirements.
Check for Gaps: Pay particular attention to exclusions for internal disputes, insolvency, and coverage for defence costs.
Prompt Notification: Always notify your insurer as soon as you become aware of a potential claim or circumstance.
Seek Advice: If in doubt, seek professional advice to ensure your D&O cover is fit for purpose and reflects your current risk profile and governance structure.

Summary

D&O insurance is a critical safeguard for directors, officers, committee members, and entities—whether companies or incorporated societies—in today’s environment of heightened scrutiny and legal risk. However, coverage varies significantly between policies and insurers. A careful review of your current arrangements—and a clear understanding of your exposures to both related and unrelated parties, including your own members—is essential.

If you have any questions about your D&O insurance or would like a review of your current policy, please contact us. We are here to help you navigate these complex issues and ensure you have the right protection in place.

Client Advisory: Professional Indemnity (PI) Insurance and Exposure to Other Parties

Why Professional Indemnity Insurance maybe a necessary tool.

In today’s business and not-for-profit environment, organisations and individuals providing professional services or advice face increasing scrutiny and legal risk. Mistakes, oversights, or allegations of professional negligence can result in costly claims from clients, members, or third parties. Professional Indemnity (PI) insurance is a critical safeguard, providing financial protection and peace of mind for professionals, companies, and incorporated societies alike.

Who Needs PI Insurance?

PI insurance is relevant for any organisation or individual that provides professional advice or services, including:

Consultants, advisors, and professionals (e.g., engineers, architects, accountants, lawyers, IT specialists)
Companies and incorporated societies offering professional services to clients, members, or the public
Board members, committee members, and office holders who may be involved in providing advice or recommendations as part of their role

What Does PI Insurance Cover?

Professional Indemnity insurance is designed to protect against financial loss arising from claims made by clients or third parties alleging:

Professional negligence, errors, or omissions in the provision of services or advice
Breach of professional duty or standards
Misleading statements or misrepresentations
Unintentional breach of confidentiality or privacy
Defamation (in some policies)
Loss of documents or data

PI insurance typically covers:

The cost of defending claims (legal fees and expenses)
Compensation or damages awarded to claimants
Settlements negotiated with claimants (with insurer’s consent)

Exposure to Other Parties

Claims can arise from a variety of sources, including:

Clients or Members: For alleged errors, omissions, or poor advice resulting in financial loss or reputational harm
Third Parties: For reliance on professional advice or services, even if not directly contracted
Regulators: For breaches of professional standards or statutory obligations
Other Professionals: For disputes over shared or collaborative work

For incorporated societies, exposure may also come from members who rely on advice or services provided by the society or its office holders.

Key Features and Exclusions to Consider

Not all PI policies are the same. When reviewing your cover, pay particular attention to:

Scope of Cover: Ensure the policy covers all professional services and advice you provide, including any new or emerging activities.
Claims Made Basis: PI policies generally cover claims made and notified during the policy period. Prompt notification is essential.
Retroactive Cover: Some policies provide cover for acts or omissions that occurred before the policy started, provided the claim is made during the policy period.
Exclusions: Common exclusions include intentional or fraudulent acts, contractual liabilities beyond common law, known claims or circumstances prior to policy inception, and certain types of fines or penalties.
Defence Costs: Most policies cover legal defence costs, but check whether these are included within or in addition to the policy limit.
Territorial and Jurisdictional Limits: Ensure the policy covers claims arising from work performed in all relevant locations.

Special Considerations for Incorporated Societies

Member Claims: Societies may face claims from members for negligent advice or services. Ensure your policy covers claims from both members and external parties.
Definition of Insured: Confirm that the policy includes all relevant office holders, committee members, employees, and volunteers who may provide professional advice or services.
Internal Disputes: Some policies may exclude claims arising from internal disputes or between members and office holders—review your policy wording carefully.

Recent Trends and Legal Developments

The professional liability landscape is evolving, with increasing expectations around standards of care, privacy, and compliance. Regulatory changes, new technologies, and heightened client expectations mean that even minor errors can lead to significant claims. For incorporated societies, the Incorporated Societies Act 2022 introduces new governance and compliance requirements, increasing the potential for claims related to professional advice or services.

Policy Extensions and Enhancements

Many PI policies offer valuable extensions, such as:

Fidelity/Crime Cover: Protection against employee dishonesty or fraud
Loss of Documents/Data: Cover for the cost of restoring or replacing lost documents or data
Defamation Cover: Protection against claims of libel or slander arising from professional activities
Statutory Liability: Cover for certain fines and penalties imposed by regulators (where insurable by law)
Run-Off Cover: Protection for claims made after a business or practice has ceased trading

Practical Steps for Professionals, Directors, and Office Holders

Review Your Policy: Understand the scope of cover, exclusions, and notification requirements.
Check for Gaps: Ensure all professional activities and individuals are covered, and review any exclusions that may affect your risk profile.
Prompt Notification: Notify your insurer as soon as you become aware of a potential claim or circumstance.
Maintain Records: Keep detailed records of advice given, services provided, and communications with clients or members.
Seek Advice: If in doubt, seek professional advice to ensure your PI cover is fit for purpose and reflects your current activities and exposures.

Summary

Professional Indemnity insurance is a vital tool for managing the risks associated with providing professional advice or services. Whether you are a company, incorporated society, or individual professional, PI insurance helps protect your reputation, finances, and future. However, coverage varies significantly between policies and insurers. A careful review of your current arrangements—and a clear understanding of your exposures to both related and unrelated parties—is essential.

If you have any questions about your PI insurance or would like a review of your current policy, please contact us. We are here to help you navigate these complex issues and ensure you have the right protection in place.

Client Advisory: Fidelity/Crime Insurance and Exposure to Losses from Dishonesty or Fraud

Why Fidelity/Crime Insurance Is Essential

No organisation—whether a company, incorporated society, or not-for-profit—is immune to the risk of financial loss due to dishonesty, fraud, or theft. Losses can arise from trusted employees, volunteers, or even external parties. In today’s environment, where financial controls are tested by remote work, digital transactions, and increasingly sophisticated scams, Fidelity/Crime insurance is a critical safeguard.

Who Needs Fidelity/Crime Insurance?

Fidelity/Crime insurance is relevant for any organisation that:

Handles money, securities, or valuable property
Employs staff, contractors, or volunteers
Makes or receives electronic payments
Is exposed to the risk of internal or external fraud

This includes companies, incorporated societies, charities, and any entity with financial assets or transactions.

What Does Fidelity/Crime Insurance Cover?

Fidelity/Crime insurance is designed to protect organisations against direct financial loss resulting from:

Employee or volunteer dishonesty, fraud, or theft
Forgery or alteration of cheques, financial instruments, or electronic instructions
Computer or cyber fraud (e.g., unauthorised electronic funds transfer)
Social engineering or phishing scams (in some policies)
Theft or robbery by third parties (in some policies)
Counterfeit currency or securities

The policy typically covers:

The value of money, securities, or property lost due to covered events
The cost of investigating and quantifying the loss (in some policies)
Legal costs incurred in recovering losses (where covered)

Exposure to Internal and External Parties

Losses can arise from a variety of sources, including:

Employees or Volunteers: Trusted individuals may commit fraud, embezzlement, or theft, sometimes over long periods before detection.
Third Parties: External criminals may target the organisation through scams, cyber-attacks, or physical theft.
Vendors or Contractors: Collusion between staff and external parties can result in significant losses.
Members (for societies): In rare cases, members may exploit their position for personal gain.

Key Features and Exclusions to Consider

Not all Fidelity/Crime policies are the same. When reviewing your cover, pay particular attention to:

Definition of Employee: Ensure the policy covers all relevant individuals, including temporary staff, volunteers, and contractors if appropriate.
Scope of Cover: Some policies focus on employee dishonesty only, while others extend to third-party crime, cyber fraud, or social engineering.
Discovery Period: Policies may only cover losses discovered during the policy period or within a set time after expiry—prompt detection and notification are crucial.
Exclusions: Common exclusions include losses arising from known dishonest individuals, poor internal controls, indirect or consequential losses, and certain types of cybercrime unless specifically included.
Limits and Sub-Limits: Check the overall policy limit and any sub-limits for specific types of loss (e.g., social engineering, computer fraud).
Deductibles: Understand the excess or deductible that applies to each claim.

Special Considerations for Incorporated Societies and Charities

Volunteer Risk: Societies and charities often rely on volunteers. Confirm whether your policy covers losses caused by volunteers, not just paid employees.
Segregation of Duties: Insurers may require evidence of sound financial controls, such as dual authorisation for payments and regular reconciliations.
Member Fraud: While rare, losses caused by members acting in a position of trust may be covered—review your policy wording.

Recent Trends and Legal Developments

The risk landscape is evolving, with a marked increase in cyber-enabled fraud, social engineering scams, and sophisticated internal schemes. Insurers are responding with new policy wordings and requirements for robust internal controls. Organisations are expected to maintain strong financial procedures and regular audits to minimise risk and support claims.

Policy Extensions and Enhancements

Many Fidelity/Crime policies offer valuable extensions, such as:

Social Engineering Fraud: Cover for losses from scams where staff are tricked into transferring funds to fraudsters
Computer Crime: Cover for unauthorised electronic funds transfer or hacking
Client Cover: Protection for losses suffered by clients due to employee dishonesty (relevant for professional service firms)
Audit Expenses: Cover for the cost of investigating and quantifying a loss
Third-Party Crime: Cover for theft or fraud by external parties

Practical Steps for Organisations and Leaders

Review Your Policy: Understand the scope of cover, exclusions, and notification requirements.
Strengthen Controls: Implement and regularly review internal controls, such as segregation of duties, dual authorisation, and regular reconciliations.
Educate Staff and Volunteers: Provide training on fraud awareness, cyber risks, and reporting suspicious activity.
Prompt Notification: Notify your insurer as soon as you become aware of a potential loss or suspicious activity.
Maintain Records: Keep detailed records of financial transactions, authorisations, and investigations.
Seek Advice: If in doubt, seek professional advice to ensure your Fidelity/Crime cover is fit for purpose and reflects your current risk profile.

Summary

Fidelity/Crime insurance is a vital tool for protecting your organisation against the financial impact of dishonesty, fraud, and theft—whether from within or outside your organisation. However, coverage varies significantly between policies and insurers. A careful review of your current arrangements—and a clear understanding of your exposures to both internal and external parties—is essential.

If you have any questions about your Fidelity/Crime insurance or would like a review of your current policy, please contact us. We are here to help you navigate these complex issues and ensure you have the right protection in place.

Client Advisory: Employment Disputes Insurance and Exposure to Employment-Related Claims

Why Employment Disputes Insurance Is Essential

Employment relationships are increasingly complex, and even well-managed organisations can face claims from employees or job applicants. Allegations of unfair treatment, wrongful dismissal, discrimination, harassment, or failure to follow proper procedures can result in costly legal action, reputational damage, and significant disruption. Employment Disputes Insurance (also known as Employment Practices Liability or EPL insurance) is a critical safeguard for companies, incorporated societies, and not-for-profits.

Who Needs Employment Disputes Insurance?

Employment Disputes Insurance is relevant for any organisation that:

Employs staff, contractors, or volunteers
Manages recruitment, performance, or termination processes
Has exposure to claims of discrimination, harassment, or unfair treatment
Operates in a regulated or unionised environment

This includes companies, incorporated societies, charities, and any entity with employees or volunteers.

What Does Employment Disputes Insurance Cover?

Employment Disputes Insurance is designed to protect organisations and their leaders against claims arising from:

Unjustified or wrongful dismissal
Discrimination (e.g., age, gender, race, disability)
Harassment (including sexual harassment and bullying)
Failure to promote, employ, or provide equal opportunity
Breach of employment contract or workplace policies
Retaliation or victimisation
Defamation arising from employment matters

The policy typically covers:

Legal defence costs (including mediation and settlement negotiations)
Compensation or damages awarded to claimants
Settlements negotiated with claimants (with insurer’s consent)
Some policies may also cover investigation costs and certain regulatory penalties (where insurable by law)

Exposure to Internal and External Parties

Claims can arise from a variety of sources, including:

Current or Former Employees: For alleged unfair treatment, dismissal, or workplace issues
Job Applicants: For alleged discrimination or failure to follow fair recruitment processes
Contractors or Volunteers: For claims of unfair treatment or breach of contract
Regulators or Unions: For breaches of employment law or collective agreements

For incorporated societies and charities, exposure may also come from volunteers or members involved in employment-like relationships.

Key Features and Exclusions to Consider

Not all Employment Disputes policies are the same. When reviewing your cover, pay particular attention to:

Definition of Employee: Ensure the policy covers all relevant individuals, including contractors and volunteers if appropriate.
Scope of Cover: Some policies focus on wrongful dismissal only, while others extend to discrimination, harassment, and other employment-related claims.
Claims Made Basis: Policies generally cover claims made and notified during the policy period. Prompt notification is essential.
Exclusions: Common exclusions include intentional or fraudulent acts, wage and hour claims, workers’ compensation, and claims arising from known circumstances prior to policy inception.
Defence Costs: Most policies cover legal defence costs, but check whether these are included within or in addition to the policy limit.
Territorial and Jurisdictional Limits: Ensure the policy covers claims arising from work performed in all relevant locations.

Special Considerations for Incorporated Societies and Charities

Volunteer and Member Claims: Societies and charities may face claims from volunteers or members in employment-like roles. Confirm whether your policy covers these relationships.
Internal Disputes: Some policies may exclude claims arising from disputes between members or office holders—review your policy wording carefully.
Compliance with Law: The Incorporated Societies Act 2022 and other employment legislation introduce new compliance requirements. Ensure your policies and procedures are up to date.

Recent Trends and Legal Developments

The employment law landscape is evolving, with increased awareness of workplace rights, diversity, and inclusion. Claims related to bullying, harassment, and discrimination are on the rise. Regulators and courts are taking a stricter approach to employer obligations, and even minor procedural errors can lead to significant claims.

Policy Extensions and Enhancements

Many Employment Disputes policies offer valuable extensions, such as:

Third-Party Liability: Cover for claims brought by non-employees (e.g., customers, clients, or members of the public) for harassment or discrimination
Investigation Costs: Cover for legal costs arising from regulatory investigations or official inquiries
Reinstatement Costs: Cover for costs associated with reinstating an employee as ordered by a court or tribunal
Crisis Management: Cover for public relations or crisis management expenses following a high-profile claim

Practical Steps for Organisations and Leaders

Review Your Policy: Understand the scope of cover, exclusions, and notification requirements.
Update Policies and Training: Maintain up-to-date employment policies and provide regular training on workplace conduct, anti-discrimination, and grievance procedures.
Prompt Notification: Notify your insurer as soon as you become aware of a potential claim or complaint.
Document Processes: Keep detailed records of recruitment, performance management, disciplinary actions, and communications with employees or volunteers.
Seek Advice: If in doubt, seek professional advice to ensure your Employment Disputes cover is fit for purpose and reflects your current risk profile.

Summary

Employment Disputes Insurance is a vital tool for protecting your organisation against the financial and reputational impact of employment-related claims. Whether you are a company, incorporated society, or charity, EPL insurance helps safeguard your people and your organisation. However, coverage varies significantly between policies and insurers. A careful review of your current arrangements—and a clear understanding of your exposures to both internal and external parties—is essential.

If you have any questions about your Employment Disputes insurance or would like a review of your current policy, please contact us. We are here to help you navigate these complex issues and ensure you have the right protection in place.

Client Advisory: Public Liability Insurance and Exposure to Third-Party Claims

Why Public Liability Insurance Is Essential

Every business, organisation, or incorporated society interacts with the public, whether through physical premises, events, products, or services. Accidents can happen, and even minor incidents can lead to significant claims for injury or property damage. Public Liability (PL) insurance is a fundamental safeguard, providing crucial financial protection against the costs of legal defence and compensation arising from such claims.

Who Needs Public Liability Insurance?

Public Liability insurance is relevant for any organisation or individual that:

Operates a physical premises (e.g., office, retail store, workshop, community hall)
Interacts with clients, customers, visitors, or the general public
Organises events or activities
Provides services or products that could cause harm or damage
Has contractors or employees working off-site

This includes companies, incorporated societies, charities, sole traders, and any entity whose operations could cause injury to a third party or damage to their property.

What Does Public Liability Insurance Cover?

Public Liability insurance is designed to protect your organisation against financial loss resulting from claims made by third parties for:

Bodily Injury: Injury, illness, or death to a third party (e.g., a customer slipping on your premises, a visitor injured at an event).
Property Damage: Damage to a third party's property (e.g., accidental damage to a client's equipment, damage to a neighbouring property during your operations).

The policy typically covers:

Legal defence costs (including investigation and settlement negotiations)
Compensation or damages awarded to claimants
Medical expenses for injured third parties (where covered)

Exposure to Third Parties

Claims can arise from a variety of sources and scenarios, including:

Visitors and Customers: Accidents on your premises (e.g., slips, trips, falls).
Contractors and Subcontractors: Actions of those working on your behalf.
Events and Activities: Incidents occurring during organised events, workshops, or community gatherings.
Products: Damage or injury caused by a product you sell or supply (though this often falls under Products Liability, which may be combined with PL).
Operations: Damage or injury caused by your business activities, whether on your premises or elsewhere.
Neighbours: Damage to adjacent properties due to your operations.

Key Features and Exclusions to Consider

Not all Public Liability policies are the same. When reviewing your cover, pay particular attention to:

Scope of Cover: Ensure the policy covers all your business or organisational activities, including any specific events or services you provide.
Territorial Limits: Confirm the policy covers incidents occurring in all relevant geographical areas where you operate.
Claims Made vs. Occurrence Based: Most PL policies are "occurrence-based," meaning they cover incidents that occur during the policy period, regardless of when the claim is made. This differs from "claims made" policies like D&O or PI.
Exclusions: Common exclusions include:
- Professional Negligence: This is typically covered by Professional Indemnity insurance.
- Employee Injury: Covered by Workers' Compensation or similar schemes.
- Motor Vehicle Accidents: Covered by motor vehicle insurance.
- Contractual Liability: Liability assumed under contract that goes beyond common law.
- Pollution: Environmental damage (often requires specific pollution liability cover).
- Asbestos: Claims related to asbestos.
Limits of Indemnity: Understand the maximum amount the insurer will pay for any one claim and in total during the policy period.
Deductibles: Be aware of the excess or deductible that applies to each claim.

Special Considerations for Incorporated Societies and Charities

Volunteer Activities: Ensure the policy extends to cover the actions of volunteers while they are performing duties on behalf of the society.
Event Coverage: If your society organises public events, confirm that these activities are specifically covered, including any temporary venues or equipment.
Premises Liability: If the society owns or leases premises, ensure adequate cover for visitors and members on site.
Member-on-Member Incidents: While less common, claims could arise from incidents between members during society activities.

Recent Trends and Legal Developments

There is an increasing focus on health and safety obligations, with organisations expected to take all reasonable steps to prevent injury or damage. Courts are often sympathetic to claimants, and legal costs can quickly escalate, even for minor incidents. This underscores the importance of robust risk management alongside adequate insurance.

Policy Extensions and Enhancements

Many Public Liability policies offer valuable extensions, such as:

Products Liability: Cover for injury or damage caused by products you manufacture, sell, or supply.
Statutory Liability: Cover for certain fines and penalties imposed by regulators (where insurable by law).
Care, Custody, and Control: Cover for property belonging to others that is temporarily in your care.
Tenant's Liability: Cover for damage to leased premises.
Worldwide Coverage: For operations extending beyond your primary country of business.

Practical Steps for Organisations and Leaders

Review Your Policy: Understand the scope of cover, exclusions, and limits.
Identify Risks: Conduct regular risk assessments of your premises, operations, and events to identify potential hazards.
Implement Safety Measures: Put in place clear health and safety procedures, signage, and training for staff and volunteers.
Prompt Notification: Notify your insurer as soon as you become aware of an incident that could lead to a claim, even if no formal claim has been made yet.
Maintain Records: Keep detailed records of incidents, safety checks, and communications.
Seek Advice: If in doubt, seek professional advice to ensure your Public Liability cover is fit for purpose and reflects your current activities and exposures.

Summary

Public Liability insurance is a fundamental protection for any organisation interacting with the public. It safeguards against the potentially devastating financial impact of third-party injury or property damage claims. However, coverage varies significantly between policies and insurers. A careful review of your current arrangements—and a clear understanding of your exposures to third parties—is essential.

If you have any questions about your Public Liability insurance or would like a review of your current policy, please contact us. We are here to help you navigate these complex issues and ensure you have the right protection in place.

Client Advisory: Defective Workmanship Insurance and Exposure to Faulty Work Claims

Why Defective Workmanship Insurance Is Important

Even the most skilled professionals and reputable organisations can face claims of faulty or substandard work. Mistakes, oversights, or failures in workmanship can result in costly repairs, reputational damage, and legal disputes. Defective Workmanship Insurance is designed to protect your business or organisation from the financial impact of such claims, providing peace of mind for you and your clients.

Who Needs Defective Workmanship Insurance?

Defective Workmanship Insurance is relevant for any organisation or individual that:

Provides construction, installation, repair, or maintenance services
Manufactures, assembles, or installs products or systems
Employs staff, contractors, or volunteers who perform hands-on work
Is responsible for the quality and durability of completed work

This includes builders, contractors, tradespeople, property maintenance firms, incorporated societies managing building projects, and any entity whose work could be subject to quality claims.

What Does Defective Workmanship Insurance Cover?

Defective Workmanship Insurance is designed to protect against claims arising from:

Faulty or substandard work performed by you, your employees, or subcontractors
Damage to third-party property resulting from defective work
Legal defence costs associated with defending claims of faulty workmanship
In some cases, the cost of rectifying or redoing the defective work (depending on policy wording)

Important: Most standard Public Liability policies exclude the cost of rectifying your own defective work, but may cover resulting damage to third-party property. Defective Workmanship cover is often an optional extension or a separate policy.

Exposure to Other Parties

Claims can arise from a variety of sources, including:

Clients or Customers: For unsatisfactory work, failure to meet specifications, or work that causes further damage.
Third Parties: For property damage or injury resulting from faulty workmanship (e.g., a poorly installed fixture causing water damage to a neighbouring property).
Subcontractors: For work performed on your behalf that does not meet required standards.
Members (for societies): For work performed by or for the society that fails to meet expectations or causes loss.

Key Features and Exclusions to Consider

Not all Defective Workmanship policies are the same. When reviewing your cover, pay particular attention to:

Scope of Cover: Confirm whether the policy covers the cost of rectifying defective work, or only resulting third-party damage.
Limits of Indemnity: Understand the maximum amount the insurer will pay for any one claim and in total during the policy period.
Excess/Deductible: Be aware of the excess that applies to each claim.
Exclusions: Common exclusions include:
- Pure financial loss (where there is no physical damage)
- Defects known before the policy started
- Wear and tear or gradual deterioration
- Design errors (unless specifically included)
- Materials supplied by the client
- Work performed outside the policy’s territorial limits
Subcontractor Work: Check if work performed by subcontractors is covered, and whether you are required to ensure they have their own insurance.

Special Considerations for Incorporated Societies and Charities

Volunteer Work: If volunteers are involved in construction or maintenance, confirm whether their work is covered under the policy.
Renovations and Upgrades: If the society is responsible for building or repair work, ensure both the work and any resulting damage are covered.
Multiple Parties: Ensure all relevant parties (society, contractors, subcontractors) are named as insureds where appropriate.

Recent Trends and Legal Developments

Clients and regulators are increasingly focused on quality assurance and compliance with building codes and standards. Claims for defective workmanship are on the rise, particularly in the construction and property maintenance sectors. Insurers are responding with more specific policy wordings and requirements for quality control and documentation.

Policy Extensions and Enhancements

Many Defective Workmanship policies offer valuable extensions, such as:

Resultant Damage Cover: Protection for damage caused to other property as a result of defective work.
Rectification Costs: Cover for the cost of redoing or repairing faulty work (where available).
Completed Operations Cover: Protection for claims arising after the work is completed and handed over.
Subcontractor Liability: Cover for work performed by subcontractors on your behalf.

Practical Steps for Organisations and Leaders

Review Your Policy: Understand the scope of cover, exclusions, and limits.
Quality Control: Implement robust quality assurance processes and regular inspections.
Document Work: Keep detailed records of work performed, materials used, and any issues identified or rectified.
Prompt Notification: Notify your insurer as soon as you become aware of a potential claim or defect.
Subcontractor Management: Ensure subcontractors are qualified, and check their insurance arrangements.
Seek Advice: If in doubt, seek professional advice to ensure your Defective Workmanship cover is fit for purpose and reflects your current activities.

Summary

Defective Workmanship Insurance is a vital protection for any organisation or individual whose work could be called into question. It helps safeguard your finances and reputation against the risks of faulty or substandard work. However, coverage varies significantly between policies and insurers. A careful review of your current arrangements—and a clear understanding of your exposures—is essential.

If you have any questions about your Defective Workmanship insurance or would like a review of your current policy, please contact us. We are here to help you navigate these complex issues and ensure you have the right protection in place.

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7 Turvey Street, Pegasus, New Zealand

offfice@campbellinsurance.co.nz

021521651