Being self-employed in New Zealand means no employer sick leave, no employer KiwiSaver contributions, no employer-provided health cover, and no employer to manage your professional liability. Your insurance needs are different — and typically greater — than an employee’s.
Why Self-Employed Insurance Needs Are Different
When you’re employed, your employer provides:
- Sick leave (statutory 10 days + many employers offer more)
- ACC workplace cover (funded by employer levy)
- KiwiSaver employer contributions
- Sometimes: group health insurance, life insurance, income protection
When you’re self-employed, none of these apply. You’re starting from zero. Every protection you have is one you’ve arranged yourself.
The Core Insurance Covers for Self-Employed Kiwis
1. Income Protection — The Most Important
If you can’t work, your income stops immediately. There’s no sick leave, no employer support. Income protection insurance pays a monthly benefit (typically 75% of income) when you’re unable to work due to illness or injury.
For self-employed NZ workers, income protection is the single most important insurance purchase.
Key considerations:
- Waiting period: How long from disability until payments start. 4 weeks is common for self-employed (no sick leave buffer).
- Benefit period: To age 65 is the most comprehensive — essential for permanent or long-term disability.
- Income definition: Your income as a self-employed person may fluctuate. The insurer will look at your income over the past 12–24 months.
Full guide: Income Protection for the Self-Employed NZ
2. Public Liability Insurance
If your business activities (visiting client premises, working on projects, selling products) could cause injury to a third party or damage their property, you need public liability insurance.
Many client contracts require a minimum of $1 million–$2 million in public liability cover. Without it, you can’t legally sign many contracts.
Full guide: Public Liability Insurance NZ
3. Professional Indemnity Insurance
If you provide professional advice or services — IT consulting, management consulting, accounting, marketing, legal — professional indemnity covers claims that your work caused a client financial loss.
FMA-licensed financial advisers must carry professional indemnity insurance. Many professional associations have PI as a membership requirement.
Full guide: Professional Indemnity Insurance NZ
4. Health Insurance
Without employer-provided health insurance, you’re reliant on the public health system for non-emergency treatment — which can mean long waits for specialists, elective surgery, and diagnostics.
Health insurance covers private treatment, giving you faster access to specialists and elective procedures — critical for minimising time off work.
Full guide: Health Insurance for the Self-Employed NZ
5. Life Insurance
If you have dependants — a partner, children — who rely on your income, life insurance is essential. As a self-employed person, there’s no employer group life scheme to provide a baseline level of cover.
Full guide: Life Insurance for the Self-Employed NZ
6. Trauma Insurance
A lump sum on diagnosis of a serious illness (cancer, heart attack, stroke) provides capital when you most need it — to cover treatment costs your health insurance doesn’t reach, to pay down debt during recovery, or to fund time off for recovery.
Full guide: Trauma Insurance NZ
ACC and Self-Employed Workers
ACC covers all NZ workers — including self-employed — for accident and injury. Your ACC levies are based on your income and the risk class of your business activity.
ACC covers: Accidents and injuries (workplace and non-workplace) ACC does NOT cover: Illness — not cancer, heart disease, mental illness, or any non-accident condition
Many self-employed workers overestimate ACC’s role. For the majority of long-term disabilities (caused by illness), ACC provides nothing — which is exactly why income protection insurance is so critical for the self-employed.
You can also voluntarily purchase additional ACC CoverPlus Extra, which provides a fixed benefit rather than a percentage-of-income benefit — useful for self-employed with variable or hard-to-document income.
Building Your Insurance Plan
For a typical NZ sole trader or contractor, a sensible insurance package in priority order:
| Priority | Cover | Why |
|---|---|---|
| 1 | Income protection | No sick leave; illness can end income immediately |
| 2 | Public liability | Required for most client contracts |
| 3 | Health insurance | Access to private care; minimise time off work |
| 4 | Life insurance | If you have dependants |
| 5 | Professional indemnity | If advice-based |
| 6 | Trauma insurance | Capital for serious illness diagnosis |
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