In a recent case the Court of Appeal found that builders who assume responsibility for construction are, like Councils and developers, generally subject to a legal duty to ensure compliance with the Building Code, even if they have delegated the work to subcontractors. The Building Act already makes this clear for residential building work and builders can’t contract out of it.
A builder is not legally liable for “betterment,” but is only liable for the actual value of the property they have damaged. In legal terms, property damage claims are governed by the principle of indemnity. The goal is to put the injured party back into the exact financial position they were in right before the damage occurred, no better and no worse.
For building contractors, public liability insurance is often seen as the ultimate safety net. It’s intended to protect you from the cost of accidentally damaging other people’s property. However, most liability policies contain exclusions that can leave contractors financially exposed in some circumstances. Understanding these critical gaps allows the contractor to be hyper-aware of the risk and implement other risk mitigation practices, so that the lack of insurance coverage never becomes an issue.
Two important but often confused types of insurance that help manage employee risks are Employers Liability and Employment Disputes Liability insurance. While both relate to your obligations as an employer, they protect you from very different threats.
An exemption to the Building Act means single-storey, stand-alone dwellings less than 70sqm can be built without requiring a building consent. There are conditions to meet, so it’s critical builders understand that failure comply with these conditions could leave you exposed to liability.
One of the most common (and complicated) issues we see from builders isn’t good old fashioned accidental damage. It’s far more costly over time, in reputation, time and money: defective workmanship allegations and the inevitable question of who pays to put it right.
How will a proposed change from joint and several to proportional liability affect builders in New Zealand?
