Whether you are a sole trader, contractor or run a company, you need to protect yourself against work and business risks.  It is wise to insure your business to protect yourself, should something go wrong. There are many types of insurance (some industry specific) to choose from, so the key is finding out what cover is the best fit for you. 

We spoke to our friends at BizCover to give us the lowdown on what is involved in business insurance and what to look out for when choosing what works for you. Here's what they had to say. 

You shouldn’t think of insurance just as an expense, instead, think of it as a protection plan, protecting your livelihood should an unforeseen (and rather costly) event occur.  It will also provide some comfort and peace of mind. The types of incidents and claims that a small business could come up against vary greatly: from slips, falls and other accidents through to claims for property loss and natural disasters.  

Is insurance mandatory for your business?

In New Zealand for some business sectors, you’ll find certain types of insurance is required. For example, you’ll find Professional Indemnity might be compulsory if you are part of a professional association. If you rent your premises, public liability may be a requirement from your landlord. Or, if you take out a contract with a large organisation, they may stipulate that you have certain insurance to work for them.  

How would you keep your business going if the worst was to happen?

If your business was impacted by an event which meant that your stock, equipment or even your premises were seriously damaged or destroyed, would you be able to cover the restoration costs?  Would you be able to sustain the business whilst you were getting things back in order and unable to trade? Have your protected yourself and your assets?

Society is becoming more and more litigious and as a business owner, you could be in the firing line if there are any allegations of mismanagement, misconduct or someone in the business has been behaving inappropriately.  It’s not just your business assets that are at risk, your personal assets are also on the line.  Having an Employers Liability policy in place can cover you not only for your legal and defence costs, but also for any damages awarded, fines & penalties and even investigation costs.

Cyber crime is on the rise - have you considered cyber insurance? 

Many small businesses think their business is too small to attract cyber criminals, yet in today’s world, size doesn’t seem to matter and all businesses are becoming increasingly vulnerable – in fact, almost 24% of New Zealand SMEs experienced a digital security breach last year, up from 18 per cent a year earlier, according to a survey by Norton. Hackers are on the lookout for businesses of any size with valuable data they can sell on the black market.

But why are they interested in small business? Small business websites are often used as loopholes to then break down the security of other businesses and get into their systems. They often don’t have the security systems in place to prevent an attack, so they can be an easy target for things like customer data, intellectual property and bank account information. Because of this, cyber insurance is an important consideration when building your risk management plan as it provides protection against the expenses and legal costs associated with data breaches.

This may all sound like a lot to think about but a quick check in on all of the info above can make sure your business insurance is fit for the upcoming challenges your business faces! If you are already part of an association, you may already have business insurance sorted so check with them first. If you aren’t and want to find out more, get in touch with Biz Cover here.

As a member of n3, you will receive 10% off the base premium of every policy you purchase. And that's off their already great rates! Go onto our exclusive n3 & BizCover page here,  enter code n3biz to apply your exclusive discount at the checkout for redemption.