NEW ZEALAND Law and Practice Contributed by: Aaron Sherriff, Tanya Wood and Nick Laing, Duncan Cotterill
Developments require compliance with privacy laws, which are regulated by the Privacy Commissioner.
to contain and/or remediate environmental contami- nation. Statutory Liability A policy unique to New Zealand and Australia is cover for statutory liability. This policy provides cover for legal liability for fines, penalties or reparation, and for costs of defending a prosecution, for unintentional breaches of an Act of Parliament. The theme in cover- age and exclusion clauses is that strict liability offenc- es are covered, as these offences require no intent or negligence to prove a contravention. Intentional and reckless behaviour is therefore specifically excluded, as is continuous offending. Liability under specific Acts is also excluded, such as the Crimes Act 1961. UAV Operators’ Liability Rapidly emerging and developing technologies have demanded a new form of insurance for operators of unmanned aerial vehicles (UAVs) in New Zealand. Insurance providers are now offering tailored cover for these operators that address specific risks asso- ciated with this area of technology. For example, the policy may cover: • damage to the UAV itself (including the airframe, launch station and ground control system); • third-party liability; • statutory liability; and • potential risks in relation to privacy. Climate Change New Zealand experiences a wide range of natural hazards, from earthquakes and volcanoes to ero- sion, landslides and extreme weather events. Climate change is increasing the severity and frequency of some of those hazards, including flooding, heatwaves, drought and wildfire. Claims for property damage have increased accordingly. The government has released a National Adaption Plan to consider various alter- natives, including options to support access to and affordability of flood insurance, or managed retreat from areas where insurers will no longer provide cover. 11.2 New Products or Alternative Solutions The New Zealand market is responding to emerging risks by offering new products into the market such as cyber, environmental and UAV operator liability
11. Emerging Risks and New Products 11.1 Emerging Risks Affecting the Insurance Market Cyber Cyber-risks to institutions such as insurers are increas- ing. The RBNZ issued non-binding guidance in April 2021, intending to ensure that insurers have a sound risk management and auditing framework in place to assess, monitor and respond to cyber-risks. The guid- ance intends to raise awareness among boards and senior management, and to promote accountability for managing cyber-risk within institutions (including insurers). The RBNZ requires insurers to report all material cyber-incidents to the RBNZ as soon as practica- ble, but at the latest within 72 hours, and to report all cyber-incidents (material and non-material) peri- odically. All businesses in New Zealand – insurance or other- wise – are also required to report to the Privacy Com- missioner any privacy breach that is likely to cause anyone serious harm. This report should be as soon as practicable, but at the latest within 72 hours. Cyber liability insurance is also a growing market, cov- ering not only the cost of data recovery but also legal fees and expert costs for crisis management. Environmental Liability The New Zealand courts take a strict approach to environmental liability, particularly given how damag- ing the consequences of a pollution incident can be to the environment. Although insurance to cover any fines that may be imposed is unlawful, insurance pro- viders in New Zealand offer cover for defence costs for a prosecution arising from property damage and/or environmental damage caused by sudden or gradual pollution incidents arising from the insured’s property or that occur when the insured is providing services. These types of policies can also cover the cost of emergency response, where there is a legal obligation
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