Earthquake Prone Building Insurance in NZ: What Business Owners Need to Know
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If your building has been identified as earthquake prone, getting commercial insurance can be genuinely difficult and in some cases, standard insurers will decline to offer cover at all. Commercial buildings are not covered by the Natural Hazards Commission (NHC), which means the entire burden falls on the private insurance market. When that market is reluctant, you need a specialist broker.
This is one of the more frustrating situations a commercial property owner or tenant can find themselves in, and it’s more common than most people realise.
What “earthquake prone” actually means
A building is classified as earthquake prone if it’s assessed at less than 34% of the New Building Standard (NBS). New Zealand is currently reforming this system, in 2025 the government announced a shift away from NBS percentages toward assessments based on actual seismic risk, with some low-rise buildings in lower-risk zones being removed from the register entirely. That reform is still working its way through, so for now, if your building is on the earthquake prone register, the insurance implications are real.
Why it makes insurance complicated
Standard commercial insurers price risk based on a building’s structural integrity. An earthquake prone building, by definition, is one that may not perform well in a seismic event. That means some insurers decline to offer cover at all, and others will offer it with significant exclusions or a much higher excess for earthquake-related damage.
For business owners, this creates a problem on multiple fronts. Your commercial property insurance, your business interruption cover, and even your ability to satisfy lease requirements can all be affected.
The NHC doesn’t cover commercial buildings
The Natural Hazards Commission (Toka Tū Ake) provides natural hazards cover for residential properties. Commercial buildings aren’t covered by the NHC scheme, which means commercial property owners are entirely reliant on the private insurance market. When that market is reluctant, you need a broker who knows which insurers will actually consider your risk, and on what terms.
What your options actually look like
Cover for earthquake prone buildings in NZ does exist, but it typically requires a specialist broker who works with a wider panel of insurers, including those that operate in the non-standard or complex risk space. The right cover will depend on the building’s engineering assessment, what remediation work has been done or is planned, the location, and the nature of the business operating from the premises.
Frequently asked questions
Can I get insurance if my building is on the earthquake prone register?
Yes. Cover for earthquake prone buildings in New Zealand does exist, but it typically requires a specialist broker with access to non-standard insurers. Standard commercial insurers often decline or apply heavy exclusions. Sentinel Insurance works with a wider panel of underwriters specifically to place this type of risk.
Does the NHC cover my commercial building for earthquake damage?
No. The Natural Hazards Commission (Toka Tū Ake) provides natural hazard cover for residential properties only. Commercial buildings are entirely reliant on the private insurance market for earthquake cover.
What affects my premium if my building is earthquake prone?
The main factors are the building’s engineering assessment (percentage of NBS), what seismic strengthening work has been completed or is planned, the building’s location and age, and the nature of the business operating from it. A current engineering report helps significantly when approaching insurers.
What if I’ve already been declined cover?
A decline from one insurer does not mean cover is unavailable. Specialist brokers access a different panel of underwriters than standard insurers. If you’ve been declined or quoted an unreasonable premium, it’s worth a second opinion.
I’m a tenant, not the building owner. Does this affect me?
Yes. If your landlord’s building is earthquake prone and underinsured or uninsured, your business interruption cover and ability to operate from those premises could be affected. It’s worth reviewing your lease obligations and your own business insurance in this context.
If you’ve been declined, quoted an unreasonable premium, or simply told it’s too hard, get in touch. This is exactly the kind of situation Sentinel Insurance handles regularly, and there’s usually more on the table than an initial knock-back suggests.
Get in touch and we’ll take a look at what’s possible.
Sentinel Insurance is a specialist business insurance broker in New Zealand. We work with businesses in complex and non-standard insurance situations, including earthquake prone buildings.
This article is general information only and does not constitute personalised financial or insurance advice. Sentinel Insurance is a licensed financial advice provider. For advice tailored to your specific situation, please contact us.
