Important Update: Resource Management Act Amendments and Insurance Coverage Changes
Effective 21 August 2025
This update outlines significant amendments to the Resource Management Act 1991 (RMA) and how these changes affect your insurance coverage—particularly Statutory Liability Insurance. These changes are important for businesses to understand so they can manage environmental and financial risk effectively.
1. Legislative Changes to the Resource Management Act (RMA)
Prohibition on Insuring Fines
From 21 August 2025, it becomes illegal to insure fines resulting from RMA breaches.
This applies to:
- All insurance policies (new and existing)
- Any RMA breach, whether it occurred before or after the effective date
Increased Penalties
The amendments introduce significantly higher penalties for breaches of the RMA.
| Offender Type | Previous Maximum Fine | New Maximum Fine | Previous Maximum Imprisonment | New Maximum Imprisonment |
|---|---|---|---|---|
| Individuals | $300,000 | $1,000,000 | 2 years | 18 months |
| Businesses | $600,000 | $10,000,000 | N/A | N/A |
These increases highlight the elevated financial risk of non-compliance.
2. Impact on Statutory Liability Insurance
Fines No Longer Covered
In line with the law change, both Ando and NZI Statutory Liability policies (including Ando’s Management Liability Suite, House products with statutory cover, and NZI’s LiabilityOne):
- Will no longer cover RMA fines
- Applies regardless of when the breach took place
Defence Costs Remain Covered
Legal and expert defence costs for RMA prosecutions will continue to be covered, subject to policy terms.
This ensures businesses still receive support during the legal process.
No Other Changes
All other aspects of Statutory Liability cover remain unchanged.
3. Insurer Actions
Both Ando and NZI are updating their policy wording to reflect these legislative changes.
Updates include:
- Explicit confirmation that RMA fines are no longer insurable
- Continued coverage for defence costs
- NZI may issue an interim endorsement for immediate clarity
4. Example Scenario
If a business is prosecuted for breaching a resource consent condition:
- Defence costs will be covered
- Court-imposed fines will not be covered
Key Takeaway
From 21 August 2025, fines for RMA breaches become uninsurable, significantly increasing financial exposure for individuals and businesses. Defence costs remain covered. Insurers are updating their policies accordingly, and it’s important for clients to be informed.
For further assistance—including client communication drafts or policy analysis—contact Venture Insurance Brokers.