10 types of insurance for small businesses in New Zealand

In NZ, everyone is covered under ACC whether they are at work, at home, or anywhere for accidents and mental injuries suffered because of an accident. But as a business owner, it is always good when you cover your employees for extra workplace health insurance for situations not covered by ACC. You can add that as an extra benefit for your employees to attract good people to work for you. ​

Read more: How does ACC work if you’re self-employed?​

It is highly recommended to have a third-party personal injury insurance, if your company owns a vehicle or several vehicles. This policy will cover compensation costs in the event people are injured or killed when your company vehicle is involved in an accident.​

As a small business owner, we’re sure you do all you can to protect the safety of your customers, suppliers, and the public. But mistakes and accidents do happen. ​

Some contracts with landlords, suppliers and customers stipulate that public liability insurance is compulsory. These are the most common reasons why you would need it.​

If your products or services cause harm to people or to property, you could be liable to pay for compensation and your legal fees to defend yourself. Claims like this can destroy a small business because costs can run into hundreds of thousands of dollars. Examples of when you can claim include the following. ​

Public liability policies include:​

If you’re in the business of providing a professional service or advice, you should seriously think about professional indemnity insurance. ​

Let’s face it that definition is broad – you could be a chiropractor or consultant; health professional or lawyer; graphic designer or accountant. ​

This insurance protects you, as a professional, against damages and legal costs associated with defending yourself against claims raised by your customers. ​

Your clients may seek compensation after they’ve experienced financial loss and allege that happened because:​

Without insurance, going through the process of repairing the damage caused by an act, omission or breach, is costly, stressful and could severely damage your reputation and finances. ​

Professional indemnity protects your assets, reputation, and your financial situation. It does this by covering investigation costs, legal costs, and damages awarded to your client (to the value of your policy cover).

Although it’s not compulsory across the board, many professions require you to hold a professional indemnity policy so you can deliver your services.​

If you have physical assets, it’s wise to cover them. You can take out insurance to protect your stock, building, contents, tools, and general property from financial loss due to loss, malicious damage, fire and theft, and natural events like earthquakes, lightning, storms and floods. ​

If your business regularly uses a vehicle or you have a small fleet – whether it’s a car, ute, or delivery vehicle – you should think about commercial motor insurance. Cover typically includes driver repatriation, signwriting, and cover for replacing keys and locks.​

Protecting your assets often isn’t enough. ​

You also need to know that your cash flow and income are taken care of should the worst happen. Business interruption insurance covers the costs of rent or mortgage payments, and your fixed utility charges (electric, gas and water bills) due to the damage and disruption caused by events like a fire, storm, theft or even a burst water pipe.​

None of us wants to dwell on this fact: sometimes people we thought we could trust behave unethically or illegally. If you’re not properly covered for this risk, you could be vulnerable to losing your business and your personal assets.​

Management liability insurance protects your company and the people running your company should a senior manager or company director behaves – or face an allegation of behaving – unethically or illegally which results in an individual or business loss.  ​

It may include behaviours like:​

Management liability also protects your business from dishonest acts carried out by your employees – for example, theft of stock or fraud. ​

Does your business have a website? Do you store sensitive information?​

Chances are you’ve answered yes to at least one of those questions. The good news is cyber liability insurance protects you in the event of a cyber attack and covers the cost of keeping your data secure.​

Hackers may deface your website which is not only upsetting but disruptive and financially damaging too. They may also get into your database and access sensitive data. A cyber liability claim will take care of the expenses incurred from the disruption to your business caused by a cyber attack.​

You never know if your business will be subject to a random audit by the IRD. If you get contacted by IRD commissioner,  it can be time-consuming, stressful, and expensive to manage and pay for completing the audit yourself.  ​

Instead, tax audit insurance gives you peace of mind by covering the costs incurred during an audit such as the professional fees from accountants, lawyers and bookkeepers.​

Now that you’ve familiarised yourself with the main types of insurance cover, it’s time to take the next step. You can choose to buy insurance policies directly from the insurer or talk with an insurance broker.​

An insurance broker is particularly helpful if your business needs are complex and you have to manage multiple high-risk scenarios. They can give you specific advice based on your situation and the type and level of cover you need.​

A lot of insurance companies provide bundles or packages, which can be cheaper than buying individual policies. Some bundle policies are based on the industry you’re in.​

Don’t feel pressured to take insurance or become over-insured. But you do need to weigh up the cost of insurance premiums against the cost of repairing the damage when things go wrong. Even one claim could ruin a small business that doesn’t have adequate insurance cover. ​

You can find a broker through the Licensed Insurer list. it is safer and better to choose a licensed and qualified broker to give you proper advice. ​

Beany works with hundreds of small businesses across NZ who care about protecting what matters the most and growing their business. We take a forward-looking approach, to help you feel empowered with the right financial information at the right time. ​

We believe that your accountant should be on your side, supporting you to make decisions that are right for you and your business.​

We have a dedicated team of remote accountants to take care of your business no matter where you are, so you can focus on growing your business. We remove the “fluff”, break down barriers, and get things done. Looking out for you is what we’re all about. Get started for free today.​