Employers Liability Insurance protects a business against civil legal action brought on by their employees who have sustained an injury arising from their employment, where ACC does not provide cover.

There are some gaps in what ACC covers for work injuries hence the importance of Employers Liability Insurance.  ACC generally covers physical injury only.  For example, if an employee becomes unwell due to work stress and takes legal action against a business for that injury (which ACC will not provide cover) an Employers Liability policy could provide cover for this liability and the associated defence costs. 

What does Employer’s Liability cover? 

The policy covers liability for ‘injury’ suffered by an employee arising from their employment with the employer. It also covers legal costs in respect of defending a claim. In some cases it may cover exemplary or punitive damages, as these are explicitly excluded from ACC cover. 

Cover is only for injuries sustained by employees in New Zealand. This can include: 

• Illness, sickness, e.g. a heart attack or stroke, resulting from work stress 
• Stress, or other emotional issues (unless linked to a physical injury) 

Who needs Employers Liability cover? 

Employers Liability cover is suitable for any business that has employees. It is important to remember that Employers Liability is not suitable for a business that doesn’t have employees (for example if you have only contractors). This is also the case where the only employees are the owner as you can't make a claim against yourself (it is often the case that owners of a business will pay themselves a salary as an employee).