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  • Kamini Patel

The Balance Between Risk And Reward When It Comes To Insurance



When you start a company, you’re not just the owner of a business, you also become the owner of a lot of risks. Just to name a few, these risks could include; new competitors, health and safety risks, data breaches/hacking, border closures, lockdowns and so on. Being able to mitigate these risks becomes a key priority within your responsibilities as a business owner. One of the strategies that many business owners adopt is transferring their biggest financial risks by taking out insurance.


Of course there are some risks that could be worth taking. For example- in the case of motor vehicle insurance, you might decide that the value of your car is reasonably low. In which case you might be prepared to take on the risk of damage to your own car and secure a policy that covers third party, fire and theft only. You would believe the risk-reward balance is being tipped in your favour. For example, you would be saving the money that you would have otherwise spent on the insurance premium.


On the other hand, let’s look at an example of deciding against taking out property insurance. In the event that your building catches on fire, you might lose all of your stock and machinery and the loss will greatly outweigh any premiums you saved by not having property insurance.


Deciding on the balance between risk and rewards can often be a tricky task. Which is why the process of educating yourself and careful consideration is incredibly important when it comes to making insurance decisions.


There some risks that are worth taking and then then there are those that just simply aren’t worth it. Apart from the insurances that you are legally required to have (i.e. workers compensation and third party personal insurance for vehicles) there are some insurance considerations you should think about.



Here Are Some Insurances That Tip The Risk vs Rewards Balance In Your Favour



Property Insurance as we talked about earlier, is important if you want to cover damage from events such as fire, theft, flooding, storms, hail, wind and lightening to your buildings, equipment, machinery and stock. In cases, this can also cover the loss of income following damage to the business property.


Professional Indemnity covers financial loss caused to third parties as a result of actual or alleged unprofessional advice.


Public Liability covers you from any claims of third party damage (including personal injury or property damage) that occurs in workplace/customer area. This also includes any damage that occurs as a result of your business activities.


Product Liability can be beneficial to have if you are a manufacturer, retailer or reseller. This covers claims of personal injury or property damage as a result of products sold by your business (made by third parties, exclusive of family).


Cyber Crimes Insurance covers any loss that has been incurred by you or the business as a result of cyber-crime. This covers any damage you cause to third parties, such as passing on malware, fraudulent payments, phishing, ransomware etc.



You understand your business better than anyone else. Only you truly understand the costs you could face in terms of; time, resources money and reputation if you were to be faced with a significant loss.


Think you need to review your insurance plans? Reach out to your local insurance broker to better understand where your risk-reward balance currently lies.


Remember, the team at TIME Insurance would be happy to chat and we’re only ever a call away.

Reach us on teru@timeinsurance.co.nz or 021 255 5995







We strongly recommend that you consider the suitability of this information, in respect of your own personal objectives, financial situation and needs before acting on it. This document is also not a Product Disclosure Statement (PDS) or a policy wording, nor is it a summary of a particular product’s features or terms of any insurance product. If you are interested in discussing this information or acquiring an insurance product, you should contact your insurance adviser to obtain and carefully consider any relevant PDS or policy wording before deciding whether to purchase any insurance product.

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