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| Domestic | Commercial | Liability | MV | Franchise If you have a question please click here.
My bank (sorry can’t be named for legal reasons) told me that my current rental property, which is 100% mortgaged, must be insured for the full amount of the mortgage. Is this correct? No. But this is a common error, made mainly by ill trained banking staff. You have never been able to insure land. There is no necessity to insure land at it cannot be accidentally damaged, burnt by fire or affected by storms. (Please note that any land damage is covered by the Accident and War Damage Commission). You should only be insuring for the amount of the ‘improvements’ on the land. Your insurance policy will only cover the dwelling, outbuildings, carports, decks, fences and in some instances gardens. We have often required the client’s lawyers to enlighten the banks at to the correct method of insuring properties. With the insurance you are not covering the ‘market’ value of the property, you are covering the cost of rebuilding. This is often confused. The sum insured that you need to apply to the house is based on a square meterage of the dwelling which incorporates the garage etc. The value per square metre should be at the minimum $1,250. If it is an executive style home use the value of $1,500 per metre. On top of this add $20,000 for demolition fees and 5% for inflation. Also you will notice that for your own private home you don’t give a sum insured, only a square meterage. This is the insurance industry norm.
I only have a bed and a TV to insure but I have been told that if I am flatting I need contents insurance. Is it really worth it for such as low value? Yes.
You are not just insuring your contents, but more importantly buying
Liability cover. If you – or even one of your flatmates causes
a fire in the kitchen – all individuals named on the lease will
be sued for a share of the cost of the repairs, whether you caused it
or not. Last year there was a case illustrated on Fair Go whereby 3
students were being sued for the total replacement of a rented house,
despite only 1 of them causing the fire. The courts and Fair Go upheld
the legal right of the landlord’s insurer to recover the costs.
I processed a claim for a client recently, where if it weren’t for this extension to the cover, the client would still be doing the accounting work rather than working on his business and the claim would still be unpaid. Basically you are covered for your accountant to work out the financial loss. It is a great help and very time effective.
No.
Unfortunately a lot of people have been caught out on this one and insurers
are not very lenient. Some insurers (not all) will extend your private
cover for commercial usage but you will need to check this out. For
some insurers, this is a specific exclusion.
Legal documents need to be plain and cover all eventualities. Be thorough in your dealings. You do have a legal obligation to enforce your sub tenants to obtain cover.
Without full detail I can’t comment specifically. Liability policies are not a guarantee of payment. They are there to provide capital to you or your organisation to finance defence costs in protecting you from having to pay out for causing loss or damage to a third party property. The rule is that if an individual or another company owns property which has been damaged whilst in your care, custody or control they must claim under their own Material Damage policy. Then that insurer seeks recovery against yourself or your company. This is when your insurance company steps in and provides capital to give a defence on the claim brought against you. However, if it is clearly evident that you were at fault then your insurance company will settle the costs that have been presented to them on the basis that they are fair and reasonable. It
is also important to note that although you have a Public Liability
insurance policy you must never at any stage accept liability –
not under any circumstances. This is a decision for your insurance company.
This leads on to another subject of contractual liability and we have
seen many organisations sign away their insurance company’s right
to recovery (and thereby voiding the policy) by accepting liability
under a contract. This is a specific ‘no no’ in any insurance
contract. If you have any further questions or issues with this you
should discuss it with your lawyer or insurance broker. Help. I need some sort of 4WD Cover. I used to have it with AA and they no longer do it. John Barley from Barley Insurances Ltd, was the driving force in getting this cover into NZ through the 4WD Association. Join the 4 Wheel Drive Association and get that training under your belt. It’s been great for the enthusiast and brought peace of mind to those out roughing the elements!! Ask about our special Fire Service Liability Cover, which goes hand in hand with the 4WD cover.
It
will definitely effect your cover. All modifications need reporting,
no matter if you think they are quite insignificant. In addition they
will be seen as a negative due to your age. Once you are over 25 the
insurers will be more obliging. Help, I am starting as a franchisor and have no idea where to turn regarding any sort of liability cover. Much depends upon the type of industry that you are in. But lets take things from a simple point of view. The most basic Liability policy that you need initially is Public Liability cover. Secondly, you will require Statutory and Employers Liability covers. Statutory Liability indemnifies the company in the event that the directors or officers of that business make an infringement of a New Zealand statute through their day to day business decisions. There are two principal statutes which are hot topics at the moment - being Health & Safety in Employment Act and Employment Relations Act and its amendments. Employers Liability has become a very necessary cover as under the Employment Relations Act there is more scope than ever before for an employee to sue an employer for not identifying and eliminating stressful situations within the workplace. Action is now being taken against organisations by employees for stressful work situations. Depending upon the type of business that you are in – ie if you are a professional and providing consultancy services then you definitely need Professional Indemnity cover which indemnifies the entity in the event that you as an employee give wrongful advice to the company’s clients. Note that if you give advice as a professional, regardless of whether you have been paid or not, and that advice is incorrect, the claimant has every right to sue if they have suffered some financial loss or incurred additional unnecessary costs as a result. Then there are other covers which are important, being Directors & Officers Liability, Product withdrawal, IT Liability etc. We should also mention that you need to be very aware of any liabilities placed on your organisation through contractual obligations. You need to discuss these in depth with your lawyer and make certain you are protecting your insurer. You must not sign away any rights of subrogation or recovery. You also need to be specifically careful about the liability policies that you purchase because they are specifically designed for the industry you are in. Therefore proposal forms need to be completed properly and considered carefully so that you are disclosing all the information to the underwriters. There is nothing worse than buying a Public Liability policy when it doesn’t respond to your occupation. The
franchise industry has some very specific risks, I would suggest that
you use an insurance broker who is a member of the Franchise Association.
(Barley Insurances is an Affiliate member of the Franchise Association
of New Zealand). Top of page |Domestic | Commercial | Liability | MV | Franchise If you have any question please click here.
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