Can I Claim Business Insurance (New Zealand) as a Business Expense in New Zealand?
Insurance premiums protecting business assets, income, and liabilities are fully deductible. This includes public liability, professional indemnity, property and contents, employer liability, and business interruption insurance. Key-person life insurance is deductible only if the policy proceeds would be assessable income on payout.
What Inland Revenue (IRD / Te Tari Taake) says
Insurance premiums that protect against loss of income or business assets are revenue expenditure and deductible under the Income Tax Act 2007. Premiums for capital replacement policies are not deductible. The revenue vs capital nature of the policy determines deductibility — if the policy pays a capital lump sum, the premium is not deductible.
When you can claim
- Public liability insurance premiums
- Professional indemnity insurance premiums
- Property and contents insurance on business assets
- Business interruption insurance covering lost income during a covered event
- Key-person life insurance structured as a revenue policy (income-replacement on death in service)
When you cannot claim
- Life insurance on a company owner that pays a capital lump sum with no income-replacement characterisation
- Income protection insurance for owner-directors — premiums are personally deductible to the individual, not the company
Good to know
Pro tip: Ask your insurer or broker to confirm in writing whether each policy is a revenue or capital policy — this documentation is essential if IRD questions the deductibility of key-person or buy-sell insurance premiums.
Important: Prepaid insurance premiums covering future periods beyond 12 months may need to be spread across years. NZ insurers charge GST at 9% on general insurance — GST-registered businesses claim the input tax credit in the normal way.
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