Optima Management Liability Package

Optima is New Zealand’s most comprehensive management liability offering which also includes an online risk management solution developed by Dacreed.

This package covers you for General Liability, Statutory Liability, Employers Liability, Directors and Officers Liability, Corporate Liability, Employment Practice Liability, Crime, Consequential Loss, Legal Expenses and Cyber Liability.

Online training tool

Dacreed is a team of hard-nosed legal experts that have worked in major commercial law firms. They have partnered with LexisNexis, business leaders, senior law partners, QCs and academics to prepare extensive legal compliance content for businesses, creating an intuitive SaaS-based online compliance training platform specifically designed to help businesses lower their risk profile and avoid problems before they arise.

This package has been designed in partnership with Delta to train your staff on the key areas of insurable liability risk that impact business. This benefits your company by lowering your risk, educating your staff, providing visibility of your organisational risk and giving you peace of mind.

By training your staff, your organisation can demonstrate that it is informed and educated on its risk. This means:

> your team are much more likely to make the right decisions
> you lower the risk of something going wrong
> you have more time to focus on your business
> it’s easier to report to your board and shareholders.

When you take out an Optima policy, you and your staff immediately receive an invitation to sign up to the training tool.

Here’s a 2 min overview of how the online training tool works.


Directors and Officers Liability

Directors and Officers have onerous responsibilities and can be held personally liable for breaches of their management duties.

Directors and Officers Liability provides protection for the Directors and Officers of a company from legal action arising from third parties (including shareholders, creditors, liquidators or regulators) making claims against them.

Example
A company working on a construction project had to halt work due to an earthquake. The company submits a business interruption claim under their property insurance to claim for the lost revenue during this time. Unknowingly to all other directors the Managing Director creates false evidence providing a $1.5M overestimate of the expected loss of income.  The other directors innocently send on this false evidence to the insurer.

The insurer pays for the claim, but despite this the company struggles to stay in business and later ceases trading. Six months later the insurer discovers that the insurance claim was fraudulent. The insurer seeks recovery under the Fair Trading Act against the Directors of the company for misleading conduct. The innocent directors are covered for the $1.5M claim and defence costs of $200K.


Corporate Liability

Corporate Liability provides cover for losses arising from securities claims brought against the company. Securities claims are actions brought by a security holder (eg. Shareholder or bondholder) for the violation of a securities law in connection with the purchase or sale of securities.

Example
A company goes through a private capital raising exercise. The company gets into financial strife and produces a number of poor results. It is alleged by one of the shareholders that the directors misrepresented the nature of the company’s financial state and that they suffered a financial loss because they were misled. They make a claim against the directors and the company for breaches of securities law obligations.


Crime

The Crime section provides cover for the dishonest theft or forgery committed by an employee or third party.

Example
A consulting company receives an outstanding invoice which they believe had already been paid. An account audit uncovers that a formerly employed accountant had forged supplier payment information over a two-year period.

While employed by the company, the accountant had set up payment accounts for legitimate suppliers however had changed the bank account details to their own. Unknowingly, the company had paid these accounts over a two-year period.

The fake accounts were only discovered after the accountant had left the company and the outstanding invoice surfaced. The audit revealed that multiple supplier accounts had the same false bank account number. The total loss was calculated to be $100K which was claimed under the company’s Crime policy.

 

General Liability

General Liability provides cover for the costs of compensating third parties for personal injury or property damage where your company is legally liable. General liability also provides cover for personal injury or property damage resulting from the products your company manufactures, installs, services, repairs, supplies or distributes.

Example
A plumber working on the second storey of a retail building accidentally causes a flood which causes extensive water damage to the first floor tenant’s stock (they were an electrical retailer and all of the stock was unusable). The plumber’s General Liability policy paid $30,000 to replace the damaged stock.


Statutory Liability

Statutory Liability provides cover for prosecution for regulatory offences under New Zealand Acts of Parliament.

Example
A transport company worker was unloading a pallet of bricks from his truck using a pallet jack. The worker missed his footing on the tail lift sending the pallet jack and cargo off the edge, launching the worker into the air. The worker suffered from a broken jaw and a broken arm due the impact of the fall. WorkSafe NZ prosecuted the company for failing to provide the correct training and supervision around the unloading and loading of their trucks.

The company was fined under the Health and Safety at Work Act. These fines are not covered by insurance however the $20K in reparations and $30K defence costs were paid by the company’s Statutory Liability policy.


Employers Liability

In New Zealand, ACC can cover accidental physical injuries or conditions that develop gradually over the course of work. Some mental injuries can be covered if they are a result of a physical injury. Employers Liability provides cover for employees injured in the workplace where ACC does not provide cover.

Example
Stress, hurt feelings or other emotional issues brought about in the course of employment. Heart attack, stroke or resulting conditions caused by stress over the course of employment.


Consequential Loss

The Consequential Loss section provides cover for the insured’s financial loss that follows on from a General, Statutory or Employers liability claim.

Example
During the WorkSafe NZ investigation of a transport company following a serious accident, Worksafe required the company to cease operations for three weeks.

The costs involved in the subsequent health and safety prosecution were paid by the company’s Statutory Liability policy however the company also incurred three weeks’ lost revenue. They claimed this amount on their Consequential Loss policy.


Legal Expenses

Legal expenses insurance offers cover that will protect your business and its directors and or employees against the potential costs of legal action brought by or against you.

Example
A honey manufacturer provided goods to a new customer. The usual quality standards were in place and the honey was delivered on time, however the customer hadn’t paid the invoices by the required date. Upon chasing, the customer refused to pay due to alleged contamination of the honey in transit. The insured informed the customer the honey was of satisfactory quality and must be paid for or legal action would follow. Investigations found that the goods were of appropriate quality and the customer was simply trying to avoid payment. The insured was covered by the Legal Expenses insurance for the NZ$25,000 of legal costs incurred in pursuing the customer and enforcing the contract in Court.


Cyber Liability

Cyber Liability Insurance protects you against liabilities arising from data protection laws, management of data and the consequences of losing or having personal or corporate information stolen and used inappropriately.

Example
An employee of a homeware retailer had their email account compromised, sending out a malicious link containing malware to a large number of customers. The malware enabled the hackers to obtain the victims’ passwords. A security specialist was brought in to remove the malware and secure the retailer’s systems and a PR company coordinated communication with the customers warning them of the risk. The policy provided cover for forensic investigation, system restoration costs, PR costs, legal costs to deal with claims by customers, damages paid to customers and security consultation.