New Zealand insurer Tower has launched legal action against the Earthquake Commission (EQC) to recover more than $NZ80 million ($78 million) which it says is owed for rectifying building issues following the Canterbury earthquakes.

CEO Richard Harding says Tower has been disappointed by the lack of progress made through an alternate dispute resolution process and sees court action as the only viable way forward.

“The refusal by EQC to pay what is owed and the resulting court action is just another symptom of an ineffective and inefficient EQC structure that has led to long delays and poor community outcomes,” he said today.

Tower says the dispute relates to work undertaken after the earthquakes, when the unprecedented number of claims caused many private insurers to step in and work with customers on land and building issues that would normally have been completed by EQC.

“As well as taking this court action we are strong advocates for insurers to manage major event claims from day one, as was successfully done for the Kaikoura earthquake,” Mr Harding said.

EQC CEO Sid Miller says the state-owned insurer is confident of its position and will continue to focus on resolving outstanding liabilities with customers and insurers.

“We have been working bi-laterally with each of the major insurers, including Tower and their experts on the matter for some time and continue to do so,” he said.

“These negotiations are commercially sensitive, so we are unable to provide any individual or total figures relating to these discussions.”

Tower also updated the market today on its response to the coronavirus, noting that 95% of its New Zealand personnel are working from home.

Customers may experience longer than usual wait times on phone enquiries, but the recent implementation of new technology has improved customers’ online access.