Do you have liability insurance for your business?
If not, you’re not alone. Many Kiwi businesses are underinsured when it comes to their liability to third parties. But, it could cost them dearly.
What is liability insurance?
Put simply, liability insurance protects your business from legal action as a result of third-party damage due to the actions of directors, employees or products.
The importance of liability insurance for NZ business has been thrown into the spotlight by the Port Hill wildfires, which caused millions of dollars of damage in 2017. Nine weeks have now been set aside for a hearing on liability for those damages, with lines company Orion and the Christchurch Adventure Park accused of negligence.
The involvement of the latter company, Christchurch Adventure Park, is a good example of why third party liability needs to be managed by every business. The statement of claim contends that the Park was asked to stop its chairlift as the fires burned below it, but didn’t do so, with some chairs then spreading the fire further.
The owners of that business are running a seemingly innocuous business but they’ve been dragged into a liability claim of $20m, with the added expense of nine weeks in court – that’s not going to be cheap.
What kind of liability cover do I need for my business?
Every business is different. But the lesson from the Port Hills Fires is that we can’t predict what events might impact our business in the future.
While we can’t always prevent accidents, we can ensure that our businesses are adequately covered to cover the costs of the damage and any legal claims that might arise.
At Bonded NZ, as insurance broker specialists we can provide expert advice on how you can manage third party risk for your business.