A growing cohort of Kiwis, especially those who own businesses, are discovering they don’t always have the cover they need in the worst possible circumstances.

It’s sometimes hard to engage people on the topic of insurance. To help you appreciate how much knowledge you have of this important area, why not answer the following questions about this crucial, but sometimes overlooked, topic?


1. What type of insurance may provide cover if a natural disaster results in my business having to shut down for a period of time?
2. What type of insurance may provide cover if a client takes legal action against me? In what industries is it either mandatory or advisable to have this insurance?
3. What type of insurance may provide a payout to cover costs relating to everything from a broken window to a tax audit to a light-fingered employee?


1. Business interruption insurance.
2. Professional liability insurance (also called professional indemnity insurance). Those working in the medical, accounting, law and financial advice industries are typically required to have this cover. 
3. Business insurance.

Many businesses don’t know how much cover they need

Don’t worry if you didn’t get all the answers right. Many people don’t appreciate all the insurance policies that may be relevant to them. Which is why it’s essential for business owners to talk to an insurance broker to find out whether their existing policies really do provide cover in the event of an accident, natural disaster or other insurable event.  

Remember, you get what you pay for

Underinsurance – when an individual or business either has no or inadequate insurance to cover their legal liabilities, or the cost of loss or damage to their assets – is an emerging risk in New Zealand.

“Some small businesses try to save money by minimising the cost of insurance premiums,” says Steadfast’s Neil Cousins. “The rise in online insurance options and price-comparison websites makes it easy to identify the cheapest policy. But usually, the lower the premium, the narrower the cover. Taking the cheap option could mean your policy doesn’t respond when you need it most.” 

Neil points out that even business owners who are prepared to pay for appropriate cover may end up in trouble if they don’t review their insurance regularly. “So keep your insurance broker up-to-date with important changes to your business, such as hiring new employees or taking on major new clients, to make sure you have the right cover.”

He also points out that even if your business doesn’t change much over time, it’s likely the space it operates in will. Cyber security is one example. A recent Microsoft report found that, although Kiwi businesses are some of the least likely of those in the Asia Pacific region to experience cyber security threats, with ransomware attacks rates on Kiwi firms 60% lower than the global average, “businesses and consumers still get stung.”


“Usually the lower the premium, the narrower the cover ”

How a broker can help 

The good news is it’s possible to arrange the appropriate cover for your business no matter what type of threat or risk facing the firm. By outsourcing the task to an insurance broker, he or she can tailor a competitively-priced policy to protect against the major risks your business faces.


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