Statutory Liability Insurance can respond to specified regulatory proceedings arising from alleged breaches of legislation.

The exact scope varies between policies.

Can defence costs be covered? #

Yes, depending on the policy.

Cover can include certain legal expenses incurred defending an insured statutory proceeding.

This can involve:

• Lawyers.
• Court proceedings.
• Regulatory prosecutions.
• Appeals.
• Other approved defence expenses.

What about regulatory investigations? #

Some policies can cover legal representation expenses associated with specified regulatory investigations.

This can be important because significant legal costs can arise before any prosecution or penalty is imposed.

Can penalties be covered? #

Potentially, but only where:

• The policy covers the relevant penalty.
• Insurance is legally permitted.
• No applicable exclusion applies.

A policy should never be treated as guaranteeing that a regulatory fine will be insured.

Can businesses and individuals both be covered? #

Depending on the policy, insured parties can include:

• The company.
• Directors.
• Officers.
• Employees.
• Other specified insured persons.

Are defence costs inside the policy limit? #

This varies.

Defence costs may:

• Reduce the available policy limit.
• Be subject to a separate limit.
• Operate differently depending on the policy.

The schedule and wording should be reviewed rather than assuming defence costs are additional to the limit.