3 types of insurance every budding new business needs

Pick a day on the calendar and there's a good chance someone in New Zealand has started or will be starting a small business on it. We are a nation of small firms - the entrepreneurial spirit is strong in kiwi culture.

Despite this self-starter essence, however, it doesn't mean every small business thrives. As the Ministry of Business, Innovation and Employment's Small Business Sector Report for 2014 found, average enterprise survival rates dropped markedly with the passage of time - and the smaller the firm, the lower the chance of survival.

With the right insurance in place, you can stop your venture from becoming just another part of this statistic.

Three types of insurance you should consider for your business.

1. General liability

There's no way around it - accidents happen on the job. Even the largest and most experienced companies will experience a situation where an employee has damaged a third party's property or person. However, an up-and-coming new business still finding its feet may see a higher rate of such accidents - and be more sensitive to their effects.

This type of insurance is particularly popular with businesses that provide a service away from their main premises - a painter, plumber or electrician, for instance. However, it's worth remembering that damage to a third party's property can occur even when a business is providing service on site - accidents can happen anywhere, after all. Wherever your company works, having general liability insurance will be essential to protecting it.

2. Business interruption

According to MYOB's Start-up Special Report from June 2013, cash flow is the key challenge that most new businesses have to contend with in the early years, and is also the chief killer of young SMEs. As a business owner, you've already had to cobble together the capital to get your business off the ground, which puts a strain on your cash flow. Imagine if something happened to choke off your revenue temporarily.

While larger, more established firms might be able to weather this storm, for small businesses it can spell the end. Business interruption cover can keep your business going even when an event has disrupted the regular flow of work.

3. Business assets

The start-up costs of your business will likely be the largest set of expenses you'll have to deal with. You'll have to possibly buy commercial property, purchase vehicles and other equipment, as well as possibly buy furniture for your office. Add on a host of other costs - marketing, bills, legal expenses - and it's easy to see why many business owners end up mortgaging their own house to start up their venture.

If anything should happen to these assets - whether the property or your equipment - it could be a serious set-back, particularly at a time when your venture is so vulnerable. Protect your capital with Material Damage insurance.


Allan Henderson

About the Author

Name: Allan Henderson        

I’m the Leader - Business Development & Sales for Rothbury’s Wellington branch. I have over 20 years experience in the insurance industry and get a kick out of finding insurance solutions for my clients.

I enjoy leading and…
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I’m the Leader - Business Development & Sales for Rothbury’s Wellington branch. I have over 20 years experience in the insurance industry and get a kick out of finding insurance solutions for my clients.

I enjoy leading and developing people (including my 3 children although they may not appreciate my leadership skills at times – or ever for that matter) and am part of a really experienced team who have a lot of fun here in Wellington.

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Disclaimer: The articles published on this blog are designed to provide general information and do not take into account any individual’s particular circumstances. We recommend that you obtain professional advice on your requirements before making any decision about a financial product.
 


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