Having an injury or fatality in your business is the last thing that anyone wants. Despite best efforts and following all procedures, sometimes an incident will happen which is just the nature of humans making errors of judgement or simply having an accident.
On other occasions it is the organisation not having significant processes and procedures in place to help prevent something from happening. Whatever the situation, you can of course be prosecuted under the Health and Safety at Work Act 2015 (“HSWA”). Here are some key things you need to know about the costs of a breach and how statutory liability insurance can assist if you find yourself in this situation.
The cost of a breach In the event of a workplace-related injury, WorkSafe may investigate and then charge the alleged offending company as well as any applicable directors, for potential breaches of the HSWA. This may include things such as not ensuring a safe workplace environment, poor health and safety standards, and a lack proper training/supervision. In 2018 the maximum fines receivable were increased, which demonstrates WorkSafe’s seriousness in ensuring high standards of health and safety in New Zealand’s workplaces.
Recent examples
Here are some examples of recent prosecutions made by WorkSafe, which were reported last year. In Hastings, a meat processing company failed to overturn its conviction for a workplace accident, which resulted from an employee having his right hand severely injured by a brisket cutter.
The total fine, which included a $45,000 payment to the staff member affected, was $280,000 with the staff member concerned having had the top joint of his right thumb amputated. In a groundbreaking judgement, the former CEO of a major port was convicted of exposing workers to a serious risk of injury or death by failing to comply with the duty to exercise due diligence as an officer.
The prosecution arose after the death of a stevedore who was crushed by a shipping container. This prosecution serves as a timely reminder that all officers, regardless of the size of the organisation, must prioritise health and safety of their workers and ensue robust health and safety systems are in place. The maximum penalty the former CEO faces is a fine of NZ$300,000. It is not known yet whether the decision will be appealed.
Other cases from 2024 have included –
How Statutory Liability can step in
Statutory Liability insurance can help fund the legal costs to defend claims brought by WorkSafe alleging a company’s breach of the HSWA. It can also cover reparation payments ordered by the Court but cannot cover fines ordered by the Court. Statutory Liability policies may also provide cover for alleged breaches of the HSWA by directors. However, it is important to review your policy to ensure this cover is in place. In the event that a Statutory Liability policy does not cover the director(s) and officer, a Directors and Officers Liability policy can respond to the legal defence costs and reparation payments a director may face, if charged with a breach of the HSWA.
Legal support
If you need to make a claim against your policy, you are often given access to legal support services through the insurer’s specialist legal panel. Access to experienced and specialist barristers from an insurer’s legal panel, who regularly fight these types of claims, can be instrumental in getting particular charges dropped and fines reduced. If you are in any business employing staff, particularly a company where high risk activities may take place, statutory liability insurance should be an important part of your insurance programme.
