Understand insurance jargon with our plain English glossary of common business insurance terms used in New Zealand.
ACC is a New Zealand government organisation that provides no-fault accident cover for all New Zealand residents and visitors. It covers injuries regardless of who caused them, but does not cover all losses - that's where business insurance comes in.
An event beyond human control, such as natural disasters (earthquakes, floods, storms, volcanic eruptions). In New Zealand, these are particularly relevant for property insurance given our earthquake and weather exposure.
An insurance broker is a licensed professional who represents you, not the insurer. They help you find the right coverage, compare quotes from multiple insurers, and assist with claims. In NZ, brokers must act in your best interests as fiduciary advisers.
Covers lost income and ongoing expenses when your business cannot operate due to a covered event (like fire, natural disaster, or theft). It helps pay fixed costs (rent, salaries, loan payments) during the closure period.
A document proving your insurance is current, showing your policy number, coverage types, limits, excesses, and dates. You'll often need one for commercial landlords, contract tenders, or proving industry compliance.
A formal request you make to your insurer for payment or coverage after an incident occurs. The process involves notifying your insurer, providing documentation, and waiting for assessment and settlement.
The specific risks and benefits included in your insurance policy - essentially what you're protected against. Different policies offer different coverage, so it's important to understand exactly what's included.
Protects against losses from cyber incidents including data breaches, ransomware attacks, business interruption from cyber events, cyber extortion, and reputation management costs. Increasingly essential for all NZ businesses.
See Excess - the amount you pay yourself when making a claim.
Protects company directors and officers personally against claims arising from their management decisions, including defence costs, personal liability, regulatory proceedings, and employment practice claims.
Legally required in New Zealand if you have employees. Provides additional protection above ACC entitlements for workplace injuries, disputed claims, defence costs, and workplace safety penalties.
The amount you pay yourself when making a claim (also called deductible). If you have a $1,000 excess and make a $5,000 claim, your insurer pays $4,000. Higher excesses generally mean lower premiums.
A specific situation or condition that your insurance policy does NOT cover. Common exclusions include intentional damage, wear and tear, war, and nuclear incidents. Always read exclusions carefully.
Unforeseeable circumstances that prevent someone from fulfilling a contract, such as natural disasters, war, or pandemics. Some policies may exclude or limit coverage for force majeure events.
The principle that insurance restores you to the financial position you were in before a loss occurred - not to profit from a claim. This is a core principle of insurance contracts.
See Certificate of Currency.
Legal responsibility for harm or damage caused to others. Liability insurance protects you against claims from third parties for personal injury, property damage, or financial loss.
A professional appointed by your insurer to assess the details and value of a claim. They investigate the circumstances, verify the loss, and recommend settlement amounts - especially for larger or complex claims.
ACC in New Zealand provides no-fault cover - you don't need to prove anyone was at fault to receive compensation. However, business insurance still provides important additional protection above ACC entitlements.
A specific cause of loss or damage that your insurance covers. Common perils include fire, theft, storm, flood, and earthquake. Policies can be 'named peril' (lists what's covered) or 'all risk' (covers everything except exclusions).
The written contract between you and your insurer detailing what's covered, what's excluded, your obligations, excesses, and the terms of coverage. Always read your policy carefully.
The amount you pay for your insurance, typically annually or monthly. Premiums are based on risk assessment factors including your industry, claims history, location, coverage limits, and excesses.
Protects professionals who provide advice or services against claims of negligence or error. Required by many professional bodies in NZ (lawyers, accountants, architects, engineers) and essential for consultants.
Covers your business premises, contents, equipment, and stock against damage or loss from covered perils like fire, theft, storm, and natural disasters.
Protects your business against third-party claims for personal injury or property damage. If a customer, visitor, or member of the public suffers harm at your premises or due to your business activities, this covers defence costs and compensation.
The cost to rebuild or replace your property to the same condition as new, including professional fees, debris removal, and code upgrades. This may differ from your sum insured.
The process of continuing your insurance policy for another term. Insurers will typically offer renewal with updated terms and premiums based on your claims history and risk profile.
Covers fines, penalties, and defence costs resulting from breaches of New Zealand legislation (Resource Management Act, Health and Safety, Building Act, etc.). Protects against inadvertent violations.
The maximum amount your insurer will pay for a claim. It's crucial to ensure your sum insured is adequate - if it's less than the true replacement cost, you may receive only a proportional payment (underinsurance).
Someone other than you (the insured) or your insurer. Third-party claims are those made against you by other people or businesses who believe you caused them loss or injury.
When your sum insured is less than the true replacement cost of your property. If underinsured, insurers may apply 'average' and pay only a proportional share of your claim, leaving you to cover the shortfall.
The person or company that assesses your risk and decides whether to insure you, and on what terms. Underwriters evaluate factors like your industry, claims history, and property to determine premiums.
The time you must wait after an event before your insurance benefits become effective. Common with business interruption insurance - typically 48-72 hours before coverage kicks in.
See Employers' Liability Insurance - legally required if you employ staff in New Zealand.
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