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Expert tips for your business insurance needs print Print

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Nobody enjoys paying insurance premiums, but having the appropriate insurance in place is good management. This guide offers you a checklist of, and expert tips for, insurance you may need for your business.

 Business Insurance

Eliminating risk

Everything you do has some risk attached. In dealing with risk you have three basic options:

  • You accept the risk, meaning you sink or swim according to chance.
  • You reduce the risk by such means as burglar alarms and fire sprinklers.
  • You transfer the risk, by buying insurance.

Obviously you need to think very hard about choosing the first option. It could mean you lose everything. For reasons of security and peace of mind, most of us choose various combinations of options two and three. The reality is you do need insurance for such things as:

  • Replacing stock if damaged.
  • Damage to business vehicles.
  • Injuring people or property damage that you (or employees) might cause.
  • Loss of profits if your business is interrupted through fire or breakdown.
  • Medical costs and loss of income if you are ill.
  • Theft by employees or customers.

Your business is your job - if something goes wrong, make sure there is some backup, cover or compensation.

A checklist and our expert insurance tips

Stock & plant

Insure these against major damage due to fire, storm, flood, water damage, burglary and theft. If you sell perishable items like frozen food, have you insured for spoilage or loss through accidental breakdown or electrical failure of freezer or refrigeration units?


You can insure your takings during business hours, or in a locked safe outside of business hours. To keep your risks low, try to bank cash frequently. Avoid a set pattern or time for these activities to frustrate thieves who might be checking out your operation. Pay employees by direct credit where possible. Encouraging EFTPOS transactions also helps to reduce cash kept on the premises.

Equipment insurance

How much would electrical or mechanical breakdown of your plant cost you in lost production and downtime? Do you have one key machine in your operation that would cause major problems if it failed?

Damage to electronic equipment

As well as theft cover, you can insure computers and other electronic equipment against accidental physical loss or breakdown.
In addition, you can insure against loss of data or cost of reinstating this data on the computer. How much would you lose tonight if your computer was stolen or the hard disk crashed?

Back up your data

Back up the data files you have been working on every day, and do a more comprehensive systems back-up once a week or once a month, depending on your computer usage. Don't forget to back up your emails as well. Remember that a fire or theft could cause the loss of everything, so keep the back-ups off site.

Motor vehicles

If you use your car for business purposes, make sure that it has business insurance cover. This is usually a bit more expensive than private cover, but you don't want to get into a dispute with your insurer if you have an accident while using your vehicle for business purposes.

Vehicle valuation

Take your vehicles to a dealer every year to make sure your insurance relates to the actual value of your vehicle. No point in insuring that van for $25,000 if you'd only get $15,000 for it on the open market. Usually the insurance company won't pay out more than the market value.

Insure goods at wholesale, not retail

Most insurance policies will only pay out for lost stock at wholesale value, not retail value. Paying a higher premium based on the retail value of the stock is therefore not worth the additional money.

Goods in transit

You can insure goods in transit both domestically and overseas. This is important if you often have consignments or large amounts of money tied up in goods outside your premises.

Loss of income

What happens if you fall ill or have an accident? Do you have an income replacement policy? ACC might cover some of your expenses, but can you pay for someone to come in and do your work? Can you pay for medical expenses?

Partnerships or companies

If you're in business with others, consider insurance to protect each partner or shareholder in a business. This could mean that in the event of a death, the money is available to buy out that partnership or shareholding from the deceased estate or provide a cash injection into the business to keep it afloat or to enable it to be sold when the market is right.

One of these strategies, covered by the correct insurance, might prevent an otherwise forced sale or closure of the business. This insurance is especially important if the business revolves around a key person.

Loss of profits

You can insure against business interruptions through damage to your premises e.g. a fire. Costs covered include rental of temporary premises, overtime, wages and salaries which have to be maintained, accountant's fees for preparation of claims, advertising, rates, taxes, insurance premiums, etc.

Newly self-employed

If you are self-employed and need time off work to recover from an injury, you may be entitled to a weekly payment from ACC. However this amount may not be enough to pay all your bills. If you're newly full-time self-employed you may need additional insurance for the first year or two of being in business, or until your income improves.

Working from home

Working from home does affect your insurance policies. You are likely to find that some items are no longer covered by your household contents insurance, so check as soon as possible with your insurers whether you need extra insurance to cover office equipment such as computers, as well as the office space itself and your car.

Public liability

Are you covered for legal liability to third parties for accidental loss or damage to property? This cover is important for many businesses - not only contractor type businesses. Public liability insurance covers only material damage to surrounding property, not your own property or goods.

Leasing a building

If you lease a building, who is responsible for damage to it such as a display window getting smashed? It's worth checking this out with your insurancer and the landlord.

Burglary versus theft

Does your policy cover you for burglary and theft? Many policies only cover burglary. Burglary occurs when the goods are taken from a locked building or vehicle. In other words, there must be evidence of forced entry or exit. That doesn't include simple shoplifting or theft by employees.

Who to buy cover from

The most important advice about insurance is to buy it from the right provider – one that has experience and a good track record in the insurance industry. If you're sold the wrong insurance cover you'll probably only find out about it when it's too late for you to recoup your loss. That could be disastrous.
Ask your business contacts who they use and do some checking first. Or talk to an ANZ Business Specialist.

Insurance company agent or independent broker?

Should you do business directly with an insurance company through one of its insurance agents or through an independent broker? There are arguments for both. If you deal direct with one of the larger insurance companies, you have the security of their financial strength and experience, but you will obviously only hear about their particular insurance products. A truly independent broker, however, should be able to offer you comparative quotes from a variety of insurance companies and is legally obliged to act in your best interests.

A good broker will be able to spot important gaps in your insurance cover, but may also be able to tell you how to get cheaper or better cover. They may also be able to advise you on risk management or risk reduction procedures you could put in place to reduce your premiums and possibly the amount of cover you require.

If you choose a broker, ask these questions:

  • How long have they been in business?
  • Can you speak with some of their clients for a reference?
  • Are they members of the Insurance Brokers Association of New Zealand?

Membership of this organisation indicates at least a basic level of professionalism.


While no one likes paying the premiums, being properly insured can allow you to sleep well at night. And most business insurance premiums are tax deductible as business expenses.

ANZ has a team of over 600 Business Bankers across New Zealand who can talk to you about your business insurance needs; talk to an ANZ Business Specialist today. You can also read more about ANZ’s insurance options for businesses, or check out our article, Business insurance in a nutshell.


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