With flooding, landslips, and earthquakes testing New Zealand’s infrastructure, many firms are facing mounting recovery costs — and some are learning the hard way that standard insurance cover is no longer enough.
Experts warn that business continuity planning and robust insurance protection must now go hand-in-hand to safeguard against growing climate risks.
The Wellington Region Emergency Management Office (WREMO) said disruptions can occur from earthquakes, floods, prolonged power cuts, or the sudden unavailability of staff. Its Business Continuity Planning Guide advises that planning in advance can help organisations maintain essential operations during a crisis. The 12-step guide recommends identifying critical services, essential supplies, and staff roles, as well as establishing relocation options and data backups.
WREMO also advises involving employees in the planning process and reviewing insurance coverage regularly. It notes that a business continuity plan (BCP) should include clear processes for alternative work locations, communication methods, and delegation of authority. Practising the plan annually, it said, allows businesses to test recovery procedures and improve response times.
Insurance specialists have noted that the recovery process can be slowed when firms lack clear continuity measures or underinsure their assets.
Gallagher, which launched its Claims Preparation Solutions team in New Zealand in July 2025, said that complex claims often require detailed financial analysis and a strong understanding of policy terms. The team includes claims professionals and a chartered accountant who assist clients with loss assessment, documentation, and submission to insurers throughout the claims process.
The need for accurate coverage has also been observed by Lockton Re. In a case involving a large New Zealand property business with assets in high seismic risk zones, the client faced rising premiums that exceeded asset value increases.
Lockton worked with the firm to establish its own insurance company and a reinsurance broking approach supported by catastrophe modelling and risk engineering. The resulting material damage and business interruption programme secured over 175% of the required capacity, allowing the client to negotiate more favourable rates and terms with insurers.
Events such as the Christchurch earthquakes, Cyclone Gabrielle, and the Auckland floods have shown how lengthy recovery periods can test both planning and coverage. Business interruption insurance is intended to cover income loss and extra operating costs following a disaster, but experts have warned that many firms underestimate how long recovery can take.
Are New Zealand businesses reassessing their readiness for future disruptions? Share your opinion in the comments.
