Business Insurance in New Zealand: Your 2025 Guide to the Contracts of Insurance Act

New Zealand’s business insurance landscape is changing with the Contracts of Insurance Act 2024, effective in 2025. This law modernizes insurance, introduces new disclosure duties, and ensures fair treatment. Stable premiums and increased coverage options benefit businesses, especially those with good claims records. This guide covers the essentials, compliance tips, cost-saving strategies, insurance options, and top providers to help your business thrive.

Why These Changes Matter

The Contracts of Insurance Act 2024 consolidates old laws, aligning New Zealand with global standards like the UK and Australia. It protects businesses by ensuring fair insurance practices while reducing costs. New rules affect how businesses buy insurance, manage risks, and handle claims, impacting small businesses, sole traders, and large firms alike.

Understanding the Contracts of Insurance Act 2024

The Act, passed on 14 November 2024, takes effect in phases, fully by November 2027. Key changes for business insurance include:

Change	Details	Impact
Disclosure Duties	Businesses must make a “fair presentation of the risk,” sharing all material details.	Ensures transparency but requires thorough documentation.
Non-Disclosure Remedies	Proportionate remedies replace “all or nothing” outcomes, like reduced claims or altered terms.	Fairer outcomes but demands accurate disclosures.
Third-Party Claims	Direct rights against insurers replace statutory charges for insolvent policyholders.	Simplifies claims, may encourage early settlements.
Claim Payments	Insurers must pay claims within a reasonable time, including investigation periods.	Faster payouts improve business cash flow.
Unfair Contract Terms	Applies to contracts under $20,000 annual value, excluding key terms like premiums.	Ensures fair policies for small businesses.

Disclosure Example: A café owner must disclose past flood damage to their premises when renewing property insurance. Failure could reduce claim payouts.
Compliance Tip: Document all risks, including employee and broker inputs, to meet the “fair presentation” standard.

Essential Types of Business Insurance

Businesses need tailored insurance to protect against risks. The Act impacts how these policies are structured:

General Liability Insurance: Covers legal liability for injuries or damages caused by your business, like a customer slipping at a café.
Property Insurance: Protects business assets, such as equipment or premises, from accidental damage or theft.
Business Interruption Insurance: Replaces gross profit during disruptions, like a fire closing a restaurant.
Commercial Vehicle Insurance: Insures company vehicles against accidents or damage, vital for delivery businesses.
Key Person Insurance: Covers financial loss if a critical employee is unavailable due to injury or illness.

Tip: Review policies to ensure they align with the Act’s disclosure and fairness requirements.

Cost-Saving Strategies for 2025

Stable premiums and increased insurance capacity offer opportunities to save:

Good Claims Records: Businesses with low claims history can secure stable premiums, avoiding rate hikes.
Risk Management:
- Install security systems to prevent theft.
- Train staff on safety to reduce accidents.
- Maintain equipment to avoid breakdowns.
Bundle Policies: Combine liability, property, and interruption cover for discounts.
Accurate Disclosure: Provide full risk details to avoid claim reductions or higher premiums.
Work with Brokers: Brokers can find cost-effective, compliant policies tailored to your needs.

Example: A construction firm with a clean claims record bundles liability and vehicle insurance, saving 10% on premiums while meeting Act requirements.

Navigating Insurance Options

The Act and market trends create new opportunities for businesses:

Stable Premiums: Businesses with good claims records benefit from unchanged rates, as noted by Gallagher New Zealand.
Increased Insurance Capacity: More coverage options for high-risk industries like construction or manufacturing.
Choosing Providers:
- Ensure providers comply with the Act’s disclosure and payment rules.
- Look for policies covering specific risks, like products liability for manufacturers.
- Compare quotes to balance cost and coverage.

Tip: Use brokers or online tools to explore options. Check MBIE for Act updates.

Comparing Top Insurance Providers

Here’s a look at leading providers for New Zealand businesses in 2025:

Provider	Strengths	Policy Offerings	Customer Service
Tower Insurance	Trusted local brand, competitive pricing.	Liability, property, business interruption.	24/7 claims support, high satisfaction.
Vero Insurance	Part of IAG, tailored business solutions.	Commercial vehicle, key person, liability.	Digital claims tools, fast response.
AIG	Global expertise, high-risk industry focus.	Custom policies for complex risks.	Dedicated advisors, strong claims handling.
NZI (IAG)	Comprehensive packages, risk management tools.	Property, liability, interruption cover.	Local support, reliable service.

Tips:

Verify providers’ compliance with the Act via FMA.
Read unbiased reviews on platforms like Trustpilot for insights.
Request quotes to compare coverage and costs.

Increased Insurance Capacity for Commercial Risks

Increased capacity means more insurers are offering coverage for commercial risks, benefiting high-risk sectors:

Benefits:
- More policy options for industries like construction or transport.
- Potentially lower premiums due to competition.
- Tailored coverage for specific risks, like accidental damage or business interruption.
Example: A manufacturing firm can now get comprehensive products liability insurance at competitive rates, protecting against defective product claims.

Tip: Consult brokers specializing in your industry to find the best coverage.

FAQ: Business Insurance and the Act

A: Phases start in 2025, fully effective by November 2027.

A: Disclose all material details a prudent insurer needs, like past claims or risks.

A: Renewals or variations after 2025 must comply with the Act.

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A: Work with brokers, document risks, and review policies regularly.

Final Thoughts

The Contracts of Insurance Act 2024 makes business insurance fairer and more transparent in New Zealand. Stable premiums and increased coverage options help businesses save while protecting assets. By understanding disclosure duties and comparing providers, you can secure the right insurance. Stay informed via MBIE and act now to ensure compliance and cost savings.