Public liability insurance is one of the most important policies that a tradesperson should have.  It is intended to protect you from the cost of damaging other people’s property and in some cases causing them injury.  Like any insurance policy, there are exclusions to make clear the things that are not intended to be covered by the policy.

In this series of three articles we explain, in plain language, some of the common exclusions in public liability insurance policies.  Part one starts with the more generic and obvious ones that have become standard in most insurance policies.  Some of them may seem unnecessary in a New Zealand context, but it is better to have clarity in the unlikely event that something does happen.

Asbestos.  Asbestos related legal action is amongst the longest and most expensive in history.  Insurers are unwilling to take on the cost of this risk and have excluded any loss related to asbestos.  Asbestos exposure could be an increased risk in Christchurch reconstruction work.

Terrorism.  Any claim related to an act of terrorism is excluded from cover.

Nuclear Radiation.  Any claim arising from radioactive nuclear material is excluded.

War & Civil Uprising.  Claims arising from invasion, civil war, revolution or other “war like operation”, including the actions to prevent it, are excluded.

Offshore Gas & Oil Platforms.  These are too risky for insurance companies to cover under their standard policies.

USA & Canada.  Claims for damage that occurred in North America, or for legal action which begins there, are excluded.  This is because of the expense of legal action and very high costs awarded by North American courts.

Vehicles, Boats & Aircraft.  Claims for damage from owning, working on or using vehicles, watercraft (although smaller ones may still be covered) and aircraft (including products incorporated into aircraft) are not covered.  So damage caused by your car, van, ute and trailers is excluded, as these should be covered by separate commercial vehicle insurance.

Pollution.  The cost of pollution, including air, water and ground pollution and its cleanup are excluded from most policies.  Some will still cover a specific event if it is sudden and unintended.

Employee Injury.  Injury to an employee that arises out of their work for you is excluded.  The ACC scheme is intended to cover this.

E-Commerce.  Anything related to damage to or loss of electronic data, networks, email, websites, software or the use of computer equipment is not covered.

Next article:  We get into the exclusions that are more relevant to builders and tradespeople, including those for building defects, rot, mould, water penetration, professional advice, design, materials and products supplied by you and the property you’re working on.

This article is intended to clarify some of the exclusions contained within most general/public liability policies available from major insurers in New Zealand.  Some exclusions can be removed by purchasing an extension to your policy, so it’s important that you check what your own policy does and doesn’t cover.  The specific wording from different insurers will vary and you should seek the advice of a professional if necessary.  This article is not comprehensive and should not be relied upon as legal advice.  Insurers will interpret and apply their own policy wording depending on the specific circumstances of each individual claim.

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