Your browser version is no longer supported, so you may experience issues while using this site.
Please upgrade to a current browser to enjoy the best experience.

Associations Liability - Claim Examples

Competitor Suspension

A sport association suspended a competitor after he had been disqualified from a race by three stewards for careless actions, ignoring a steward’s instruction to retire from a race and for other breaches of the rules.

The suspension was contested vigorously through the NZ Sports Tribunal process. The substance of the original disqualification was conceded by the aggrieved competitor but mitigating circumstances were cited. The association was equally adamant that it had acted correctly but the tribunal found that the initial suspension was dealt with in a manner which lacked fairness and natural justice. 

The insured’s claim was dealt with as a Professional Indemnity matter. During the proceedings, over nearly two years involving four appearances at the tribunal, there were significant legal costs incurred by both sides. An expensive exercise in “due process”.

PDF/Email Options

Inappropriate Advice

The Insured is an industry association. One of its member firms was involved in a personal grievance arising from the redundancy of an employee. 

The firm lodged a claim against the association alleging that an association employee had provided information and guidance to the redundant employee contrary to the interests of the member firm.

The allegations were substantiated and the claim was settled by VL under the Professional Indemnity section of the policy. (The association employee was subsequently dismissed).

PDF/Email Options

Improper Advice

A professional association was investigated by the Commerce Commission for giving advice to its members, which could have been construed as advocating price-fixing, a restrictive trade practice under the Commerce Act. 

The association made a claim for representation costs in respect of the official enquiry and VL responded under the “Official Investigations” extension of the policy with legal assistance which resulted in no punitive action being pursued. The association was however directed to modify its advice to its members. VL’s costs were significant.

PDF/Email Options

Official Investigation

The insured, an industry training organisation, was called to account by the Tertiary Education Commission after the TEC received an anonymous complaint alleging that the insured had misreported on the findings of a staff survey which sought views that might allow it to enhance its services and organisational strategies. The complaint specifically suggested that in the published survey findings the insured had omitted reports of serious misconduct, breach of policy and fraudulent reporting of trainee achievement outcomes.

VL responded by treating the issue as a claim under the “Official Investigations” extension of the Association’s Liability policy and commissioned a lawyer to assist the insured in its response to the TEC. The lawyer found that the allegations were entirely without foundation and guided the insured accordingly. The TEC agreed. VL paid legal costs.

PDF/Email Options