Claim 1 – Landscaper

A contractor was doing some landscaping work at a client’s property when they accidentally put a shovel through a buried telephone cable. Chorus made the repairs and sent the contractor a bill of $3,000.

The landscaper made a claim under their public liability policy and the “underground services” clause was triggered. Under the policy there is an obligation on the insured to enquire of the relevant authority (eg. local council) about the location of any buried services and to take all reasonable precautions to prevent damage.

In this case the claim was declined because the landscaper did not make any enquiry before digging. Even though the job itself may be small, as it was in this case, the cost of a mistake can still be significant, so the right precautions must be taken in every case.

In a more expensive example, a pipeline carrying jet fuel to Auckland airport burst in 2017, costing its owner $14.3m in lost revenue and other costs. It was found that a digger operator, working for nothing while looking for swamp kauri, had damaged the pipeline three years earlier and it and finally ruptured.

Claim 2 – Builder

In this case an Auckland builder was using an excavator to demolish an old set of external concrete stairs prior to doing an extensive alteration. When originally poured the concrete had set around an existing wastewater pipe, which was damaged when the excavator pulled out the stairs. At the time there was little evidence that the pipe was in use and workers on site assumed it to be a bit of old pipe, so they left site without notifying Watercare.

Overnight wastewater backed up, flooding a number of nearby homes. After the mess was cleaned up and repaired by Watercare they  presented the builder with a bill for $12,000.

This claim was paid because the builder had checked with council about the location of the pipe prior to starting work. Unfortunately, the builder had misinterpreted the depth of the pipe on the plans, believeing it to be buried deeper than it actually was. 

Liability Insurance