Statutory Liability Insurance can provide valuable protection for regulatory matters, but it does not cover every breach of legislation.

The exclusions vary between insurers and policies.

What can be excluded? #

Depending on the policy, exclusions can include matters involving:

• Deliberate or intentional breaches.
• Fraud or dishonesty.
• Criminal conduct.
• Prior known circumstances.
• Matters already underway before the policy commenced.
• Certain taxes or duties.
• Particular legislation specifically excluded by the policy.
• Penalties that cannot legally be insured.
• Certain employment or workplace matters covered elsewhere.

This is not a complete list.

Are all fines and penalties covered? #

No.

A policy cannot override legislation that prevents a particular fine or penalty from being insured.

Whether a penalty can be covered depends on:

• The legislation involved.
• The offence.
• Applicable law.
• Policy wording.
• Circumstances of the breach.

Defence costs may still need to be considered separately from the penalty itself.

What about deliberate breaches? #

Statutory Liability Insurance should not be treated as protection for deliberately ignoring legal obligations.

Policies commonly contain exclusions for intentional, dishonest or fraudulent conduct.

Are prior investigations covered? #

Do not assume so.

An investigation, incident or circumstance known before the policy commenced can fall within prior-known-circumstance or prior-proceeding exclusions.

Material regulatory matters should therefore be disclosed when arranging insurance.

Does every regulator fall within the policy? #

Not necessarily.

The policy definitions and exclusions determine which statutory proceedings and legislation are insured.