Get the right insurance for your business with MoneyHub
Finding the right insurance at the right price can be difficult - your business is unique, and so is its insurance needs. Risks exist in everyday business and the right insurance cover provides much-needed protection against unforeseen costs, such as compensation and legal fees. 

With the help of MoneyHub, you can understand what you need and select a policy that perfectly matches your business needs and risks, meaning you will only pay for the cover you need.

This guide covers:

• ​What is business insurance?
• Why take out business insurance?
• Why is business insurance important?
• How much does business insurance cost?​
• Business insurance options
• What kind of businesses buy business insurance policies?
• 10 tips to save money on business insurance
• Frequently asked questions
• Making a claim

Business insurance pays out money if your business suffers an unforeseen loss while carrying out its day-to-day business activities. Best of all, business insurance reduces uncertainty should something go wrong as the policy can pay out claims to keep the business going. 

Business insurance policies vary from basic cover (used by self-employed tradesmen and professionals) to comprehensive cover for larger companies.​

Insurance is all about covering risks and making sure you are not financially affected by any incident beyond your control. If your business accidentally causes millions of dollars of damages, could it afford to cover the costs? If the answer is no, there is a real risk that the business would go bankrupt.  Business insurance is used to protect the business and the business owner if unforeseen events occur in the ordinary course of business. ​

Business insurance protects a business from theft, employee fraud, legal damages, legal costs and being held personally responsible for injuries or damages that occurred within the business. Business insurance policies vary; getting cover for the events that are most likely to happen is the key to never finding your business unprotected. 

Beyond basic cover for business property such as vehicles and equipment, public liability insurance provides cover for the great unknown when it comes to dealing with the public and continues to be a popular insurance choice among New Zealand businesses.
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Some professions, such as financial advisory, accounting, law and insurance brokerage make it compulsory to have professional indemnity insurance. In such cases, talking with the professional governing body (such as the New Zealand Law Society or Chartered Accounts New Zealand) will give an idea of what policies are available specific to the profession. 

The cost of each policy will be unique to what cover you want and a number of facts about your business, including:

1. The type of business you run and the industry it operates in
2. The annual turnover
3. The number of employees
4. The size of the premises
5. The claim history of the business

As a business owner involved with all parts of your business, knowing what business insurance you need and how much of it to buy can be hard to find out. We've put together a guide to simplify business insurance. 

The type and price of insurance policy you buy will be determined by the number of employees or contractors you employ, the size of your business (turnover), the industry you're in and the specific type of work you do, the amount of cover you need, your claims history and how long you have been operating.   

To help you understand the different types of business insurance, we outline the most popular policies below:

Public Liability insurance

• Public liability insurance covers claims for compensation from anyone not employed by your business who suffers an injury or who owns property that is damaged because of your business.
• This could be something as simple as a visitor to your business slipping on a wet floor, resulting in a spinal injury and a claim for compensation. It can also cover more serious compensation claims, such as construction accidents.
• A public liability policy will pay not only the compensation costs but also legal costs associated with any incidents. If your business has employees, contractors or representatives who come into contact with members of the public (either at their premises or yours), asking for a public liability insurance quote is a good idea.

Professional indemnity insurance

• Professionals are engaged in selling their knowledge and expertise to their clients - this can be done in a number of ways, including advisory services, consultancy and.or producing designs. If there is an issue where a client loses money because there was a mistake in your work, there may be a claim for compensation.
• If your business offers such services where clients rely on your expertise, a professional indemnity policy can insure against the risk of compensation and associated legal costs.

Cybersecurity insurance

• Cybercrime continues to be an issue throughout New Zealand; insuring against the risks and losses is worth considering.

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Business vehicle insurance

• Business vehicles insurance covers companies with one vehicle up to those with large fleets. Insurance options include cover for damage to business vehicles, liability for damage to other vehicles, costs for load recovery and salvage costs as well as some other defence and liability costs.
• If your company owns vehicles then a suitable policy can protect their value and the risk of damage they cause to other vehicles, as well as any legal liability issues that arise due to the behaviour of employees driving vehicles.  

Business interruption insurance

• If you can’t work because an unforeseen event prevents you from operating your business as usual, business interruption insurance will compensate you for lost income. Such instances usually involve sudden loss or damage to your premises or equipment.
• If you are incurring additional expenses to keep your business running after an event, business interruption insurance can also cover these costs.  

​Statutory liability insurance

• If your business has a risk of unintentionally breaching New Zealand law,  insurance can cover the costs involved in defending any alleged breach as well as fines or penalties. 

Employers’ liability insurance

• Business owners need to provide cover for anyone who is injured or harmed during the course of their employment in an incident that is not covered by ACC.
• And, if you employ subcontractors, you are also responsible for their safety either on-site or while working at your premises.
• Employers' liability insurance covers the costs associated with such personal injury claims as well as the cost of defending them
• But, cover won't usually be provided if the incident is being covered by ACC, any deliberate or willful non-compliance with any Act or HSE notice or any pre-existing illnesses and injuries, among other exceptions.

Personal income protection

• This insurance cover is most popular with small or medium-sized business owners and offers cover by way of a regular income for the period that you (as the business owner) are unable to work due to an injury or illness.

Employee fraud insurance

• Polices are available that will cover money or goods you’ve lost due to an employee's dishonesty of an employee. ​

Credit risk insurance

• Insurance policies can cover your business against the risk of a customer not paying their invoice. 

Landlord insurance

• If your main business is property rental, we have a dedicated Landlord Insurance guide that covers everything there is to know about insuring your properties. ​

Generally, business insurance is popular in the following industries: 

• Building, trades and construction
• Sales retail and consumer products
• Hospitality
• Transport - for example; taxis, couriers and freight
• Manufacturing and engineering
• Property - for example; rentals and body corporate entities
• Home-based businesses
• Non-profit and community-based

Every business is different, and individual insurance needs vary - business insurance looks at the potential risks and provides for them. For example, a cafe beside a beach will have different business risks to that of a construction company working on a skyscraper. 

Nothing is obvious when it comes to business insurance, so we've put together a list of frequently asked questions to help find the right policy for your business.

Q: Who do I need to provide employers' liability cover for?
A: Business owners need to provide cover for anyone who is injured or harmed during the course of their employment in an incident that is not covered by ACC. And if you employ subcontractors, you are also responsible for their safety either on-site or while working at your premises. Employers' liability insurance covers the costs associated with such personal injury claims as well as the cost of defending them. Business owners are exposed to claims by employees and contractors for a number of conditions, including:

• Injury caused by occupational stress

• Heart attack or stroke as the result of mental effort or mental strain arising out of, and in the course of, employment
• Disease caused by gradual process – particularly where the employer's obligation to provide a safe workplace has not been met
• Disease or infection caused by air conditioning systems or passive smoking
• Nervous shock caused by defective premises

• Bystander claims caused by witnessing a traumatic injury or fatality

Q: How is a business insurance premium calculated?
A: There are many variables which factor into what your premium will be. These include how long your business has been operating, the number of employees or contractors you employ, the size of your business (turnover), the industry you're in and the specific type of work you do, the amount of cover you need and your claims history. 

Q: What is business interruption cover?
A: If you can’t work because an unforeseen event prevents you from operating your business as usual, business interruption insurance will compensate you for lost income. Such instances usually involve sudden loss or damage to your premises or equipment. If you are incurring additional expenses to keep your business running after an event, business interruption insurance can also cover these costs. 

Q: Can I cover my tools, business equipment and stock?
A: Yes; all of these are the primary focus of many business insurance policies. When insuring any business asset, it's best to cover it for its fill value, keep all receipts and any other documentation which proves ownership. 

Q: Do I need business insurance if I work from home?
A: Possibly. Even if you don't own business premises or employ staff, business insurance can cover expensive legal costs and lost income.

Q: Can I claim on business insurance if I go bankrupt?
A: No - policies exclude claims for lost income due to bankruptcy. But, business insurance can help prevent bankruptcy by offering financial protection.

In almost every case, making a claim will be an easy process. Having a business insurance provider will make it even easier, as they will be more familiar with the policy, excess level and terms and conditions. They can also be easier to deal with than your insurer, avoiding call centres and delays. To have the best experience when making a claim, follow these steps:

1. If the loss arises due to a physical event, you must take all reasonable steps to prevent further loss - call the police in case of theft, burglary or vandalism and take photos of any damage.  If possible, keep any damaged property for the insurer to inspect and assess the loss
2. If there is a potential legal issue due to an accident, negligence or similar, contact your insurer and give the full details of what happened. The insurer will advise further on the matter.
3. If you need to claim for business expenses, prepare an estimate for the costs you are incurring as a result of the event.
4. Provide the details of any person who may be responsible for the damage or loss

If your claim is rejected, appeal and complain

• Your insurer should inform you, in detail, why the claim was rejected and how it falls outside your policy.
• If you disagree, jump on the phone and explain why your claim meets the T&Cs of the policy you bought.
• If the insurer still refuses to cover your claim, ask your insurer for a "letter of deadlock". This letter lays out why the insurer disagrees with your claim. Once you have the letter of deadlock, you can access the Insurance & Financial Services Ombudsman Scheme which resolves disagreements between customers and their insurers.
• Their free-of-charge service will make the final decision about your claim and order the insurer to pay out if they find in your favour. 
• If your insurer isn't a member, you can complain to Financial Services Complaint Ltd who follow a similar process.​ ​​

Final Thoughts - Buying Business Insurance Policy - Balancing Price and Coverage
​When it comes to getting the right business insurance policy, it's a balance of price and coverage. Don't be tempted by a cheap policy with a lot of exclusions - business events cannot be predicted and a policy that covers you for the real risks of exposure is invaluable. If in doubt about anything, talk to a business insurance provider - they work with you to find the best policy to suit your situation. ​

Do you have experience with business insurance that you would like to share? Email the MoneyHub team and help improve the way New Zealanders buy business insurance.