When you run a small business, thinking about risk comes with the territory. Managing that risk is the main purpose of insurance.
For businesses that provide business services like accountants, advertising agencies, consultants and recruitment companies, insurance is important to ongoing continuity.
A lot of businesses within New Zealand fall into the small to medium sized business category. That means that protecting the ongoing sustainability of the business is essential, as many businesses don’t have an endless supply of funds.
Some of the main risks to businesses operating in the services industry are around asset damage, business interruption and general liability.
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Business Assets Insurance
Office based business generally rely on computers, laptops, technology and data centres etc for day to day operations. If these assets were damaged or lost, the business could be in serious trouble. The business could be hit not only with the cost of replacing all of the damaged assets but with the loss of income from the interruption in operations. Without insurance many small to medium sized businesses may struggle to survive.
Business assets insurance can cover damage to, or loss of, business assets like hardware, office equipment, computers and technology systems. In the event that the office premises itself is damaged business asset insurance can cover that too.
For example;
A fire accidentally breaks out in the kitchen at the offices of a recruitment agency. The fire is put out but in the process all of the office equipment including laptops, printers, phones etc are damaged by the fire, the smoke and the water from the sprinkler system. The replacement and/or repair of the office equipment is covered by business asset insurance.
More information about business asset s insurance >>
Business Interruption Insurance
Another type of insurance that is important for services based companies is business interruption. This insurance is designed to cover scenarios when a business’ assets are lost or damaged, resulting in an interruption to day to day operations, which ultimately leads to a loss of profits. For the services industry a serious interruption for the business often means an interruption for the client which can be costly. Business interruption insurance is especially important if the business operates out of a fixed location such as an office or studio.
The recruitment agency that was damaged by the kitchen fire had to close its office for several weeks while the building was repaired, the data was restored and the office equipment replaced. During this time business interruption insurance covered the business’ loss of profits related to the interruption.
More information about business interruption insurance >>
General Liability Insurance
Most small to medium sized businesses should have general liability insurance (also known as public liability) to cover them in the event that they are responsible for damage done to another’s premises. Liability for damage to someone else’s property can be costly for the business, so it pays to have this type of cover.
More information about general liability insurance >>
Business Checklist
Find our if your current business insurance is really what you need - go through our 10 point checklist for business services here >>