As a small business owner, or an aspiring one, you’ve probably thought about websites, customers, and cashflow. But what about insurance?
In New Zealand, many small businesses operate without proper cover. It’s easy to assume that insurance is something only large companies need. But the truth is, one unexpected event – an accident, theft, or claim against your work – can put your business at risk. The right insurance protects your hard work, and helps you recover quickly if things don’t go to plan.
Why insurance matters for small businesses
Running your own business often means your personal and professional life can overlap. Unlike larger companies, you might not have big cash reserves to fall back on if something goes wrong. Business insurance is your safety net, protecting:
– Your revenue: if an event causes damage to your building or stock, business interruption insurance can help keep money coming in so you can cover your day-to-day expenses.
– Your assets: from laptops to specialist equipment, your tools are essential to keeping your business running, so it’s important they’re protected.
– Your reputation: liability cover ensures you can meet legal costs or compensation claims if a client, stakeholder, or member of the public says your work caused them harm.
Key types of insurance for small businesses
Public Liability Insurance
This is one of the most common covers for small businesses in New Zealand. It protects you if your business activities accidentally cause damage to someone else’s property or result in injury. For example, if you’re a freelance photographer and knock over a guest’s laptop at an event, or you’re a tradie and accidentally damage a client’s flooring, public liability insurance covers repair or replacement costs – so you don’t have to. All businesses and self-employed people should have this cover. And if you’re a contractor, liability insurance might be one of the terms and conditions in your contract.
Professional Indemnity Insurance
If you provide advice, design, or professional services, professional indemnity insurance is worth considering. It covers you if a client claims that your work or advice has caused them financial loss. For example, you’re an accountant and a client alleges your advice led to lost revenue, or you’re a web developer and an error in your code causes downtime for your client’s online store. Indemnity cover helps with legal defence costs and any settlement.
Business Asset Insurance (Material Damage)
Your business might run on a laptop, tools, furniture, stock, or specialist equipment. Business asset insurance covers these against risks like theft, fire, or accidental damage. Even if you work from home, don’t assume your home contents policy automatically covers business equipment — it’s worth checking your policy wording. When it comes to business asset insurance, you can choose between:
– Indemnity cover: Takes wear and tear into account when paying your claim.
– Replacement cover: Pays full costs of replacing an item.
Commercial Property Insurance (Material Damage)
If you own the premises your business operates from, commercial property insurance is essential. It usually comes as a material damage policy and protects both you, and any lender you’ve borrowed from, against risks like natural disasters, fire, burglary, and other events that can damage your building. If you lease your space, your landlord typically insures the building; but you should still arrange cover for any fit-outs, fixtures or improvements you’ve added.
Business Interruption Insurance
What happens if a fire, flood, or major event means you can’t operate for weeks or months? Business interruption cover helps replace lost income and covers ongoing expenses (like rent or staff wages) until you’re back on your feet.
Commercial Vehicle Insurance
If you use a car or van for work (even if it’s your personal vehicle) you may need commercial vehicle insurance. Private car insurance doesn’t cover the vehicle when it’s being used for business purposes.
Cyber Insurance
More NZ businesses are online than ever before. Cyber insurance protects against data breaches, hacking, or cybercrime. For sole traders, contractors and any business that handles customer data, payments, or sensitive information, this cover can be essential.
Key Business Person Insurance
If your business relies heavily on one person (often you), this cover can provide financial support if that person is unable to work due to illness, injury or death. Key business personal insurance gives your business a realistic chance of surviving financially while contingency plans are worked through.
Tailoring cover to suit your business
Every business is different. A freelance graphic designer won’t need the same level of cover as a café owner or a tradie. The key is to think about:
– The risks your business faces day-to-day. Common risks include: fire or natural disaster, theft, stock damage, loss in transit, IT crime or hacking, injury or property damage caused by your products or services, product recall, employment disputes, health and safety breaches, losing a key employee, a sudden drop in revenue, and even being sued.
– The financial impact if those risks happen.
– The stage your business is at. Are you starting small? Scaling fast? Employing staff?
When to think about business insurance
We recommend starting to think about insurance when you’re first starting out — even if your insurance needs are basic. Then review your needs at least once a year so cover can be adjusted as your business changes or grows.
Getting business insurance advice
No single policy can cover all your business risks so it’s likely you’ll need more than one policy. The good news is, you don’t need to figure this out alone. A trusted General Insurance Advisor can help you assess the financial risks you face, compare policies from multiple providers, explain the fine print, and tailor a package that suits your budget and needs.
Before meeting with an advisor, we recommend taking the following steps to help speed up the process of securing the right insurance for your business:
– Put a realistic value on your assets
– Pull a copy of your current business accounts and identify important numbers like gross profit
– Look at your business processes to spot potential risks.
Insurance might not be the most glamorous part of running a business, but it’s one of the smartest. For sole traders, contractors and small business owners in New Zealand, the right cover provides peace of mind and practical protection, so you can focus on running your business.
If you’re ready to take the guesswork out of business insurance, get in touch with our team today. We’ll help you find cover that fits your work, your risks, and your goals – leaving you free to grow your business with confidence.