Business Insurance – What do I need to know
Disruptions to your business can be stressful and come with a big cost. Insurance is a product you can buy to protect you and your business against specific risks.
Know your risks
Working out what your risks are means answering two important questions:
- What could go wrong at work or with my business?
- Have I got it covered?
Common risks include:
- fire or natural disaster, eg floods, earthquake
- theft, eg equipment
- stock damage
- loss in transit
- IT crime or hacking
- injury or property damage caused by your products or services
- product recall
- employment dispute
- health & safety breach
How do I protect my business – Insurance Council of New Zealand
Get good advice
Business insurance is often tailored to the needs of a business. Go through an insurance broker, agent or company for advice on a specific insurance package that is right for your business.
You should feel comfortable that the broker, agent or business is experienced, is giving objective advice, and will be there to help you if you have to make a claim.
Some types of business insurance
There are many different types of insurance you can get for your business depending on the size of the business, and what industry you are in.
Liability
Business can become legally liable for their actions, even if the actions or the result of those actions are unintended. Legal liability can take many forms. Common types include:
- negligently causing loss to someone else’s property or business
- negligent professional advice when providing professional services
- unintentionally breaching a statue
For people acting in a commercial capacity, the main forms of commercial liability insurance are:
- general public and product
- employers’
- statutory
- employment practice
- professional indemnity
- directors’ and officers’
Some general public liability
Public liability insurance – If your business accidentally injures someone, or damages someone else’s property, your business may be legally liable to the person who is injured or had their property damaged. The cost of a legal liability you owe to someone else for injuring them or damaging their property could be significant. Public liability insurance can cover these costs.
Statutory liability insurance – If you or your staff unintentionally breaches a statute like the Resource Management Act 1991 or the Health & Safety Work Act 2015, your business can be held accountable. Statutory liability insurance can cover legal costs, as well as reparation for any harm caused by the breach
Directors and officers liability insurance – Covers claims against the individual directors and officers of you business for negligence or breach of duty when they are acting in their capacity as a director or officer.
Cyber liability insurance – Covers your business for risks relating to the use of the internet and other computer infrastructure. For example, if your work computers are hacked, or a virus is deposited on your system, or you suffer some other kind of cyber-crime committed against you, cyber insurance will cover:
- Legal fines if your customers’ privacy is breached
- Costs to repair your IT systems or databases
- Fees for specialist crises management advice to help protect your business’s reputation
- Loss of profits if you cannot trade.
Insurance is only one tool in your resilience tool kit – it doesn’t make all risks disappear!
If you need more help
Here are some websites you can check out: