Small Business Insurance: Why you might want to ensure you’re covered!

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 incidents and claims that a small business could come up against vary greatly, from claims for property loss and natural disasters to workplace incidents like harassment.

So to give you a hand we’ve outlined a few of the key considerations around the need for adequate insurance for your business.

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 business owner you could be in the firing line if your employee sues your business for damages as a result of bodily injury or illness arising out of his or her employment where the ACC does not provide cover for, your business and even personal assets might be on the line.  Having a 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, cyber insurance may be required

Many small businesses think their business is too small to attract cyber criminals yet in today’s world size doesn’t count 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.

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.  And because they often don’t have the security systems in place to prevent an attack they can be an easy target for things like customer data, intellectual property and bank account information. Cyber insurance is an important part of your risk management plan as it provides protection against the expenses and legal costs associated with data breaches.

This is general advice only.

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