The Ultimate Guide to Business Insurance NZ

Different types of insurance coverage for your business.

Being a business owner is exciting because there’s so much potential for positive outcomes. But there’s also the risk that negative things may arise from time to time. Business insurance is an important risk management strategy for business owners that can help to minimise or eliminate the financial impact of a diverse range of business risks. Read on to find out everything you need to know about the different types of business insurance available, including answers to FAQs.

Different types of business insurance

A diverse range of business insurance policies are available, including:

  • General business insurance
  • Professional indemnity
  • Public liability
  • Management liability
  • Cyber insurance
  • Tax audit.

Industry-specific policies are available within these broad categories to cater for different business needs.

Let’s look at each of the broad categories in turn.

General business insurance

General business insurance provides you with protection against the loss, damage or theft of your business premises and assets, and financial loss if your business operations are interrupted.

The product types under general insurance include:

  • Property. This provides insurance cover for the accidental damage of commercial property, contents, stock and equipment inside your business premises.
  • Building. If your business building is damaged by fire, a natural disaster or another insured event, Building Insurance provides financial compensation.
  • Portable Equipment. Any business equipment or tools that you carry with you for work purposes anywhere in New Zealand can be covered under Portable Equipment Insurance.
  • Business Interruption Insurance. If your business is interrupted by a covered event, you can be compensated for lost profits during the time you were unable to trade, as well as claim preparation costs and rent.

Professional indemnity insurance

Professional indemnity cover protects your business against financial loss or legal costs if you provide advice or a specialised service and the recipient wants to make a claim against you for negligence.

Public liability insurance

Public liability cover protects you against any injury or personal loss claims that a person may make against your business. For example, if a customer or supplier injured themselves while on your premises.

Management liability insurance

Management liability cover protects business owners, directors and nominated senior managers against personal legal liability for many actions when running a business, such as workplace health and safety.

Cyber liability insurance

Cyber liability protects your business against claims that may be made after you’ve suffered a cyber attack. It can help protect your business if the attack results in your customer’s information being compromised.

Tax audit insurance

Tax audit insurance can cover your business against any additional costs that may be necessary to prepare for a tax audit, such as additional accounting fees.

Do I need business insurance?

Business insurance is something you likely can’t afford to do without if you want to proactively manage business risk. It provides you with protection and the associated peace of mind that an adverse event won’t derail your business.

If business insurance seems like an unnecessary business expense, it’s worth taking some time to understand the financial impacts your business might face if you were to lose everything in a fire, or be sued by a disgruntled customer. You can tailor the type and amount of cover to suit your business needs and your cash flow.

You should check what you are (and aren’t) covered for when you sign up for any insurance policy to make sure it is appropriate for your business needs. Always read the policy wording and product disclosure statement before you take out your cover. It’s important to check what exclusions apply to your policy; there may be certain events that are not covered. It’s important to ask as many questions as you need so you understand exactly what events you will be covered for.

How much business insurance do I need?

For general business insurance, the amount of cover you need will depend on the value of the assets you are covering. You’ll first need to work out the replacement value of your business assets, and then you’ll have a clear indication of how much cover you require.

If you need public liability insurance as part of a contract you are taking on, often the amount of required insurance will be listed in your contract. The required amount may also be a condition for a business or trade license.

Review your business insurance

Business insurance helps to protect against the financial impact of risk. You should regularly review your business insurance needs and cover to ensure your protection — especially if your business circumstances or market conditions change.

If you need to get quotes for business insurance, BizCover can help you compare business insurance options from New Zealand’s leading insurers today.