Business Insurance for Contractors in New Zealand

What Contractor Insurance Typically Covers

Contractor insurance isn't a single policy, it's a package of covers built around how you work. The components that matter most will depend on your trade, but here's what a well-structured contractor insurance programme usually includes:

Public Liability
Protects you if your work damages someone else's property, or causes an injury that isn't covered by ACC. In New Zealand, most personal injury is covered by ACC rather than claimed through the courts. Limits typically range from $2 million to $20 million depending on the nature and scale of your work.

Tools and Equipment
Covers theft, accidental damage, and loss of the tools and equipment you rely on to do the job, whether they're on site, in your vehicle, or in transit.

Contract Works (Construction All Risks)
Protects the work in progress, materials, partially completed structures, against damage during a build or renovation project.

Commercial Motor Vehicle
Covers your work vehicles for the way they're actually used: carrying loads, towing, accessing sites. Includes options for unspecified vehicles used in your business.

Statutory Liability
Covers legal defence costs, reparation, and insurable fines arising from unintentional breaches of New Zealand legislation. Fines under the Health and Safety at Work Act 2015 can't legally be insured, but defence costs and reparation can be.

Employer Liability
Protects you against claims from employees who suffer injury or illness in connection with their work, beyond what ACC covers.

The right combination depends on your specific circumstances. Talk to your broker about what applies to your situation.

What Affects the Premium on Contractor Insurance

No two contractors pay the same premium, and that's not arbitrary. Insurers assess a range of factors when pricing contractor cover. Here's what typically moves the number:

Trade and Activity Type
Higher-risk activities, excavation, heat work, work on complex structures, attract higher premiums. The nature of what you do is the single biggest pricing factor.

Annual Turnover
Premium scales with turnover because larger revenue generally means more work, more exposure, and more potential for a claim.

Number of People in the Business
More staff or subcontractors means more people whose actions could give rise to a liability claim. Insurer pricing reflects that headcount.

Work Locations and Site Types
Contractors working on high-risk sites, large commercial projects, infrastructure, specialist environments, carry more exposure than those doing standard residential work.

Claims History
A history of claims, particularly liability claims in the past five years, will affect both pricing and the terms insurers are willing to offer.

Limits and Excess Chosen
Higher liability limits cost more. A higher excess reduces the premium but means more out of pocket when a claim occurs. Getting this balance right is part of what a broker does.

Why Standard Business Insurance Often Fails Contractors

Most contractors assume they're covered. They've got a policy, they're paying premiums, and they've never had a claim. Job done.

But here's what actually happens when something goes wrong on site: the insurer reads the fine print, and the fine print wasn't written with your trade in mind. A standard business policy designed for an office-based business looks very different from what a plumber, electrician, builder, or civil contractor actually needs.

Business insurance for contractors in NZ isn't one policy. It's a combination of covers, and the gaps between them are where claims get declined.

The Risks Contractors Actually Face

You're working on someone else's property. You're using expensive tools and equipment. You've got staff or subbies on site. You're under contract, which means if something goes wrong, there's a paper trail pointing straight at you.

Think about what's actually at stake:

• Your equipment damages a client's vehicle or property
• Your tools get stolen from the back of your ute overnight
• You accidentally damage a pipe and flood the building you're working in
• A structural issue emerges six months after you've finished the job
• A worker is injured and brings a claim that falls outside ACC

Any of these can happen on a normal working day. Without the right cover in place, you could be paying out of pocket, or defending a claim on your own.

What Business Insurance for Contractors in NZ Should Include

Public Liability Insurance

This is non-negotiable for any contractor working on client sites. If your work damages a third party's property, public liability cover can pick up the legal costs and compensation. Most injury claims in New Zealand are covered by ACC rather than the courts, so property damage is usually the main exposure. Many contracts require it as a condition of engagement, and for good reason.

The question isn't whether you need it. It's whether the limit is high enough. A $1 million limit sounds like a lot until you're looking at a commercial property damage claim.

Tools and Equipment Cover

Your tools are your livelihood. Replacing them out of pocket after a theft or damage event can cost thousands, sometimes tens of thousands. Tools cover protects your equipment whether it's on site, in your vehicle, or in storage.

Watch the policy wording here. Some policies exclude tools left in an unattended vehicle overnight. Others have low sub-limits per item. Worth checking before you need it.

Contract Works Insurance

If you're working on a construction or renovation project, contract works (also called construction all-risk) covers the work itself while it's in progress. Fire, storm, accidental damage, if something destroys what you've built before it's handed over, you're not starting again at your own cost.

This is often overlooked by smaller contractors. It shouldn't be.

Professional Indemnity

Not just for consultants. If you provide advice, design input, or specifications as part of your work, and many trades do at some level, professional indemnity covers you if a client claims your advice caused them a financial loss. Design-and-build contractors especially need this.

Statutory Liability

Breaching the Health and Safety at Work Act 2015 can result in significant fines. Statutory liability cover can pay legal defence costs and reparation. Fines under the Health and Safety at Work Act can't legally be insured, although fines under some other Acts can be. Given how seriously WorkSafe NZ takes site safety, this isn't optional for contractors with staff or subcontractors.

Employers Liability

ACC covers most workplace injuries, but it doesn't cover everything. If an employee suffers a loss that ACC doesn't fully compensate, and they take legal action against you, employers liability fills that gap.

The Subcontractor Problem

If you use subbies, your exposure doesn't end with your own work. Depending on how your contracts are structured, you may be liable for what they do on your jobs. Some principal contractors require subbies to carry their own public liability. Others don't check at all.

What we see at Gerrards is that many contractors have a policy that covers their own work but doesn't account for subcontractor liability. That's a gap worth closing before a claim reveals it.

Why Going Direct Isn't Always the Right Move

Direct insurers can only offer their own policies. They can't tell you whether a competitor's policy would cover your specific trade better, or whether the wording on their contract works section actually matches how you operate.

As an independent brokerage, Gerrards works for you, not the insurer. We compare options across up to 20 insurers, explain the policy wording in plain language, and check that the cover you're buying fits your trade. And if you ever need to make a claim, we advocate on your behalf. That matters more than most contractors realise until they're in the middle of a dispute.

What to Watch Out For

A few things that catch contractors out regularly:

Claims-made cover. Professional indemnity policies usually respond to claims made during the policy period, not when the work was done. If a client comes back two years later about work you did last year, you need a policy in force when the claim is made, with a retroactive date that goes back far enough to cover that work.

Exclusions for specific trades. Some insurers exclude certain high-risk activities, working at height, roofing, demolition, asbestos-adjacent work. If your trade involves any of these, you need a policy that explicitly covers them.

Vehicle and plant. Your ute is probably covered under a separate motor policy, but what about larger plant and machinery? Hired-in plant? These often need separate cover.

Under-insurance. If your tools, equipment, and materials are worth more than your sum insured, you may not recover the full loss, and some policies apply an average clause that reduces even partial claims. We review policies annually to catch this before it becomes a problem.

Getting the Right Cover

Every trade is different. A roofing contractor's risk profile looks nothing like a cabinet maker's. The right policy for you depends on what you do, where you work, whether you employ staff, and what your contracts require.

This is general information only. For advice tailored to your situation, get in touch with our team.

Gerrards works with contractors across New Zealand, from sole traders to larger construction businesses. We'll compare the market, explain what you're actually buying, and help you avoid paying for cover you don't need or missing cover you do.