Running a small business requires you to fill so many roles; accountant, marketer, sales and customer service, let alone doing your actual business. There is always something new to learn, and new potential mistakes to make.
Despite your best efforts, when it comes to insuring your business sometime mistakes can be made, especially if this is the first time you have had to navigate the world of business insurance. Here are some common mistakes we see being made, and how you can avoid them:
Not understanding the risks of your business, and how to cover them
Liability this, indemnity that… Do you feel like you step into a world of jargon when it comes to insuring your business? It all sounds important and can be difficult to know what applies to you. The first step is to understand where your business is vulnerable or exposed to risk; ask yourself these questions to start thinking about common types of insurance:
What type of work does your business do, and what does a mistake look like?
If you give advice, Professional Indemnity insurance can cover the cost of a claim if you make a mistake or provide incorrect information that negatively impacts your client. If a client or a member of the public could get hurt, or have their property damaged because of your work, Public Liability can help to protect you from the cost of a claim of this type of accidents.
What helps you get the job done, and what would happen if you suddenly didn’t have it?
Tools, equipment, stock are a few things that can be critical depending on your occupations. If it would cost too much, or take too long to replace right away, you may want to cover your tools and/or contents with Tool and Portable Equipment or Property insurance and, if you are unable to continue working, you may cover the down time with Business interruption insurance.
How do you interact with your customers?
If you interact with them in-person, they come to your premises, or you go to their property, you could consider Public Liability insurance, to cover costs if they become injured or you accidentally damage their property while carrying out your work.
What type of information do you keep, how do you store it, and what would happen if someone else got their hands on it?
If you keep a digital copy of sensitive client information, like email addresses, phone numbers, or payment details, you may want to consider Cyber Liability insurance to cover you in the event of a cyber-attack or breach.
These are just a few of the risks which a business owner may want to cover. Click here to see BizCover’s full range of covers.
Remember to always read the policy wording, as different policies can have different types of endorsements and details in the type of coverage they may provide.
Being underinsured
No one wants to spend money on insurance. We know it’s tempting to select a lower level of cover to reduce premiums, but this can leave you shocked and insufficiently covered when making a claim.
Inflation
With inflation, the cost of living, and business operation costs increasing. Consider covering you, your tools and assets for the rising costs of replacing or covering them, not what you paid for them – you may be surprised at the difference.
Not covering the full cost of your risks
Insurance is probably the last thing you feel like spending your hard-earned dollars on, it can be so tempting to go with the cheapest option just to get it ticked off your to-do list. But remember, if you select cover levels for less than the value of the risk you are covering – you may be left out of pocket when it comes to claims time. It’s important to review your risks and determine how much you will need to cover the worst-case scenario claim that may come your way.
Not reading your inclusions and exclusions
When shopping around and comparing policies you are most likely looking at those key details; price, excess, and cover amount, but not all policies with the same name are made equal. Be sure to really understand what each insurer offers in their policy wording; you may be surprised at the difference when it comes to inclusions and exclusions. Understanding what is excluded from your policy is essential to ensure your business is adequately protected and not left exposed if you need to make a claim. Weigh up all the pros and cons to be able to make a well-informed decision to suit the needs and risks of your business.
Setting-and-forgetting
Hiring staff, a fancy new tool, extra stock for the busy season, a product launch, more customers, ever-changing production costs – things don’t stay the same for long in business, and neither should your business insurance. It’s easy to set your business insurance up and renew every year. But you can quickly outgrow your coverage, especially when business is booming. Many businesses owners can be left surprised when they aren’t covered for the number of staff, amount of stock, or for the value of the tools and equipment they have. Remember to keep on top of your cover, any time something changes – think insurance.
If you are a small business owner looking to get covered, you can compare quotes from multiple trusted insurers and buy online at Bizcover.co.nz. Being a member of a programme facilitated by Smart Loyalty makes getting covered through BizCover is even better! Remember to use code “SMARTLOYALTY5” at checkout to earn 5 points for every dollar you spend on the base premium of new insurance policies.
This information is general only and does not take into account your objectives, financial situation or needs. As with any insurance, cover will be subject to the terms, conditions and exclusions contained in the policy wording or Product Disclosure Statement (available on our website). Target Market Determination document is also available (as applicable). © 2025 BizCover Limited.