Public liability insurance is mandatory for many New Zealand businesses through the supply, service, or lease contracts they accept – but is it important even if a business isn’t compelled to purchase a policy?

New Zealand’s largest insurance broking collective thinks it is. In a blog post, NZbrokers, which represents over 87 independent businesses across New Zealand, explained how public liability insurance is an important tool for businesses to use to mitigate risk.

“Public liability insurance covers your business when you are liable for damage to someone else, injury to someone else, or another party incurs losses in connection to work that you’ve done or products that you’ve supplied,” said NZbrokers in a blog post.

“Even when you do your job or run your business to the best of your ability and according to industry best practices, things can and do go wrong. These can be minor inconveniences or can create major dramas.

“If there is no public liability insurance, the resulting claims on the business owner could put the business in jeopardy and even compromise the livelihood of the business owner. Bankruptcy could become a very real possibility.”

According to NZbrokers, there are four key reasons for businesses to have an appropriate public liability insurance policy in place: as requirement to operate, to minimise costs during accidents, to instil trust and maintain the business’s good name, and to protect employees from liability.

“It’s advisable for business owners to seek advice from an insurance broker who is experienced with public liability insurance and who can help you understand what policy is right for your business,” said NZbrokers. “Working with a broker helps you get the right insurance policy for the right price and can also make it easier if you need to make a claim.”