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Employers Liability - Claim Examples

Legionnaires Disease

The insured operated a clothing factory in its old multi-storey building which had an air-conditioning system. Several employees contracted Legionnaires disease. 

It was determined that the source of the infection was in the air conditioning system which the insured, who was also the building owner, had failed to maintain adequately. As there was no ACC cover for the illness, the employees sued the insured for loss of wages and other general damages. 

The insured’s claim was accepted under its Employers Liability policy and with the assistance of VL the claims were settled out of court for $34,000. Defence costs were $28,000.

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Post-Traumatic Stress

The insured company, commercial photographers, had a contract with a Government department to produce videos for the personnel training. This work was done solely by a specialist employee. Much of his work involved filming and editing disturbing material. The employee eventually developed a severe stress condition and his employment was terminated on an agreed basis.  Nonetheless he took additional legal advice and a civil a claim was made against the insured. 

The court found that the stress was caused by the nature of his work and that the insured had failed to take adequate precautions to mitigate his stressful duties, despite being aware of the issue for a long period of time. VL defended the claim and after unsuccessfully attempting an out of court settlement the Court awarded a total in excess of $200,000 which was indemnified with defence costs exceeding $80,000.

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