Insurance Hub: Material DAmage & Business Interruption
Material Damage Overview
This summary provides an overview of the coverage and conditions of the Material Damage section of Anglican Insurance Board Risk Management Limited Material Damage and Business interruption Policy. For an explanation on specific details, please contact insurance@anglicanmovement.nz.
Period of cover: 1 Jan 2025-1 Jan 2026
What is Covered
Physical loss or damage to insured property that is unintended and unforeseen during the policy period.
Includes coverage for buildings, contents, stock, machinery, money, portable electronic equipment, refrigerated goods, shade sails, monuments, and works of art, among others.
Key Extensions
Alternative Residential Accommodation: Covers costs for temporary accommodation if residential property is uninhabitable due to insured damage.
Capital Additions: Covers new property acquired during the policy period.
Hazardous Substance Emergencies: Covers charges from Fire and Emergency NZ for hazardous substance emergencies.
Hidden Gradual Damage: Covers water damage from leaking internal pipes discovered during the policy period.
Landslip and Subsidence: Covers sudden and unforeseen damage caused by ground movement, excluding gradual subsidence or erosion.
Lost or Stolen Keys: Covers costs to replace locks and keys if lost or stolen.
Temporary Removal: Covers insured property temporarily removed from the premises for up to 3 months.
Transit: Covers insured property while in transit within New Zealand.
Unlawful Substances: Covers contamination caused by illegal drug activities under specific conditions.
Conditions
Prompt notification of claims and steps to minimize damage.
Progress claim payments are made with acceptable evidence, but overpayments must be refunded.
Reinstatement of the sum insured is possible under certain conditions.
Insurers may inspect damaged property and manage salvage.
Exclusions
Consequential economic loss (e.g., loss of profit).
Damage due to production processes, faulty design, wear and tear, or gradual deterioration.
Damage caused by natural disasters unless specified.
Damage caused by war, terrorism, nuclear events, or communicable diseases.
General Conditions
Notify insurers within 60 days of any change in risk or use of premises.
Deductibles apply, and the highest deductible will be used for claims involving multiple deductibles.
Fraudulent claims will result in forfeiture of benefits.
GST is added to claim payments if recoverable.
Insurance is voidable in case of material misrepresentation or non-disclosure.
Insurers have subrogation rights to recover losses from third parties.
Policy is governed by New Zealand law.
General Exclusions
Damage caused by asbestos, biological/chemical materials, defective workmanship/design, deterioration, unexplained disappearance, prior damage, interruption, land movement, machinery breakdown, money, nuclear events, terrorism, theft by employees, and unoccupancy for more than 60 days.
busines Interruption Overview
This summary provides an overview of the coverage and conditions of the Business Interruption section of the Anglican Insurance Board Risk Management Limited Material Damage and Business interruption Policy.
For an explanation on specific details, please contact insurance@anglicanmovement.nz.
What is Covered
Loss of income due to interruption or interference with business operations caused by damage to insured property.
Covers loss of gross profit, revenue, and additional costs incurred to maintain business operations.
Key Extensions
Alternative Accommodation for Residents: Covers costs for relocating residents and their belongings if their unit is uninhabitable due to damage.
Claim Preparation Costs: Covers costs for assessing and preparing valid claims.
Occupational Right Agreement: Covers losses related to capital sums or fixed deductions owed to residents if property cannot be reoccupied or resold due to damage.
Redeployment Costs: Covers costs for relocating employees permanently to alternative sites.
Severance and Redundancy Payments: Covers payments legally required for employees terminated due to damage.
Conditions
Prompt notification of claims and steps to minimize business interruption.
Progress claim payments are made with acceptable evidence, but overpayments must be refunded.
Insurance ceases if the business is wound up or permanently discontinued unless agreed otherwise.
Exclusions
Losses from offshore gas dependency.
Losses due to accumulated stocks, fraud, misrepresentation, or cessation of business for reasons other than damage.
Losses caused by war, terrorism, nuclear events, or communicable diseases.
General Conditions
Notify insurers within 60 days of any change in risk or use of premises.
Deductibles apply, and the highest deductible will be used for claims involving multiple deductibles.
Fraudulent claims will result in forfeiture of benefits.
GST is added to claim payments if recoverable.
Insurance is voidable in case of material misrepresentation or non-disclosure.
Insurers have subrogation rights to recover losses from third parties.
Policy is governed by New Zealand law.
General Exclusions
Damage caused by asbestos, biological/chemical materials, defective workmanship/design, deterioration, unexplained disappearance, prior damage, interruption, land movement, machinery breakdown, money, nuclear events, terrorism, theft by employees, and unoccupancy for more than 60 days.
Unforeseeable Losses & Loss Prevention
The purpose of insurance is to insure against unintended or unforeseeable losses. Our policy document states:
“If any physical Loss or Damage - unintended and unforeseen by the Insured - happens to any Insured Property during the Period of Insurance, the Insurer/s will indemnify the Insured for that Loss or Damage subject to the terms and conditions and exclusions of this Policy and any memorandum thereto.”
When is a loss foreseeable?
A loss is generally unforeseen when it occurs suddenly and without any prior signs or warnings.
It becomes foreseeable when:
you knew about the issue,
you reasonably should have known based on the signs, or
you've had previous similar losses and didn’t take steps to prevent them happening again.
Examples
You know the loss is likely to happen. This is when you are aware of a hazard or condition and you understand that damage is probable rather than merely possible.
You know the guttering is blocked after several heavy downpours, and water has already started pooling near the foundation. You don’t arrange cleaning or repairs, and the next storm causes interior water damage.
You’ve had warnings or signs a reasonable person would recognise. These are situations where even if you personally didn’t expect damage, the warning signs were clear.
The sound system repeatedly cuts out and emits burning smells. You continue using it until an internal electrical failure damages equipment and wiring.
You intentionally expose property to a known risk. This is when you knowingly take an action that greatly increases the likelihood of damage.
Storing large quantities of cardboard or donated goods directly against electrical switchboards or heaters, ignoring standard safety guidance.
You discover a problem but delay taking action. If you know something needs attention but you postpone repairs or checks, any resulting loss may be considered foreseen.
A window latch breaks, leaving the window unable to be fully closed. Months later, a storm causes rain to blow inside and damage flooring.
The damage develops gradually over time. Gradual deterioration is almost always foreseeable, especially in older church buildings.
Corrosion around old plumbing fittings causes slow seepage that eventually results in water damage.
You’ve experienced multiple losses of the same kind and done nothing to mitigate them. If the same type of incident keeps happening and you take no steps to reduce the risk, insurers can treat the next occurrence as foreseeable.
You have multiple burglaries over two years through the same unsecured window. You don’t install a lock, alarm sensor, or security film. Another break-in occurs — this may be seen as foreseeable.
Preventing Losses
Strong loss‑prevention measures are one of the most effective ways to keep premiums manageable and reduce the risk of a claim being declined. We recommend inspecting your buildings regularly for signs of damage and ensuring you have appropriate loss‑prevention practices in place. Consider the following measures:
Good security measures – for example: intruder alarms, alarm monitoring, security patrols, making sure windows and doors are securely locked when the building is not in use, helpful neighbours keeping an eye out, security cameras.
Fire prevention and detection – for example: smoke or heat detectors, alarm monitoring, sprinklers, fire extinguishers in kitchens, replacing old electrical wiring, keeping wheelie bins secured and away from buildings, keeping grounds well maintained.
Good building maintenance – for example: fixing leaks in roofs and windows, upgrading old electrical wiring, keeping trees trimmed to avoid touching buildings.
AIB has a number of useful checklists to help us assess our properties areas of risk. We recommend working through them.
Natural Disaster
What counts as a natural disaster?
In this policy it means an earthquake, hydrothermal or geothermal activity, a volcanic eruption or a tsunami, including fire resulting from any of them. Storms and floods are not considered Natural Disasters under the policy.
The cost of Natural Disaster insurance is cost-prohibitive for most of our Mission Units so we have developed a policy on how we respond as a diocese.
Under the Diocesan Natural Disaster Insurance Policy (.pdf), all Mission Units that don’t carry their own Natural Disaster cover pay a levy to collectively cover selected buildings within the diocese.
See the Natural Disaster Centrally Insured Assets for 2026 (.pdf) for the buildings covered by this policy.
Excesses & Special Limits
An excess is the amount you pay yourself towards a claim before the insurer pays the rest. A special limit is the most the insurer will pay for specific claims.
Perils Excesses
For claims that are not caused by a natural disaster, the following excesses apply. If more than one of these excesses could apply to the same event, you only pay the highest one, not the total of them all.
| Type of Loss | Excess |
|---|---|
| Damage to residential building and contents where the building is not tenanted or rented out, i.e. occupied by clergy | $400 |
| Damage to residential building and contents where the building is tenanted or rented out | $3,000 |
| Water-related damage | $5,000 |
| Contract works extension — contract valued below $1,000,000 | $5,000 |
| Contract works extension — contract valued above $1,000,000 | $10,000 |
| Any other loss where no excess is specified | $3,000 |
Natural Disaster Excesses
The excess for a natural disaster claim depends on where the insured building is located and when it was built. The excess is a percentage of the site value, but it is never less than the minimum or more than the maximum shown in the table.
Natural disaster excesses do not apply to property that is classed as residential property under the Natural Hazards Insurance Act 2023. If you pay an excess to the Natural Hazards Commission (formerly the Earthquake Commission) for natural disaster damage to a residential building, your insurer will reimburse it, as long as the Commission accepts the claim in whole or in part.
| Property | 20% share | 80% share |
|---|---|---|
| Wellington CRESTA Zone 10 | 5% of site value; minimum $5,000 and maximum $10,000,000 for one event | 5% of site value; maximum $5,000,000 for one event and $250,000 for any one site |
| All other regions — built post-1934 buildings | 5% of site value; minimum $5,000 and maximum $10,000,000 for one event | 2.5% of site value; maximum $5,000,000 for one event and $150,000 for any one site |
| Buildings built before 1935 anywhere in New Zealand | 10% of site value; minimum $10,000 and maximum $10,000,000 for one event | 2.5% of site value; maximum $5,000,000 for one event and $150,000 for any one site |
Examples
Wellington CRESTA Zone 10: the site value is $4,350,100, therefore 5% is $217,505. 20% share: this is within the minimum ($5,000) and maximum ($10,000,000), so the excess is $217,505. 80% share: this is below the $250,000 limit for any one site, so the excess is $217,505.
All other regions, post-1934 building: the site value is $1,203,000, therefore 5% is $60,150 and 2.5% is $30,075. 20% share: $60,150 is within the minimum ($5,000) and maximum ($10,000,000), so the excess is $60,150. 80% share: no minimum applies and $30,075 is below the maximums, so the excess is $30,075.
Pre-1935 building: the site value is $615,080, therefore 10% is $61,508 and 2.5% is $15,377. 20% share: $61,508 is above the $10,000 minimum and below the $10,000,000 maximum, so the excess is $61,508. 80% share: no minimum applies and $15,377 is below the maximums, so the excess is $15,377.
Special Limits
What is a special limit?
A special limit is the maximum amount the insurer will pay for a particular type of property, loss, cost or policy extension. It applies to that specific type of claim even when the policy’s overall sum insured or limit of liability is higher. Any applicable excess and other policy terms still apply.
What is a ‘share’? This cover is shared between more than one insurer. Where you see a percentage ‘share’ (for example, 20% share and 80% share), each share is one insurer’s portion of that cover, and each has its own limit or excess. That is why some figures differ between shares. Where a single figure is given, it applies across the whole cover.
Material Damage Special Limits
| Type of Loss | What it means | Special limit |
|---|---|---|
| Alternative residential accommodation | If a home you insure can’t be lived in after damage the policy covers, this pays for somewhere else to stay, plus the cost of moving out and back in. |
25% of the full reinstatement cost. 85% share: $500,000 for one event and $1,000,000 during the policy period. 15% share: $1,500,000 for one event. For example, the reinstatement cost is $952,000, therefore 25% of $952,000 is $238,000. The 85% share’s portion is $202,300. This is below its $500,000 limit for one event, so it pays $202,300. The 15% share’s portion is $35,700. This is below its $1,500,000 limit, so it pays $35,700. The total paid is $238,000. |
| Deterioration | The policy doesn’t cover wear and tear, corrosion, mould, rot and similar gradual deterioration. This limit applies to other loss or damage that results from it. | $15,000 for one event, for resulting loss or damage that is not expressly excluded. |
| Effects of employees, directors and others | Covers the personal belongings (including money) of clergy, ministers, employees, trustees, directors, visitors and consultants while on or about your premises, or while being worn, kept, carried or used by employees at work. |
$50,000 for one event. For the 80% share, the maximum is $1,000 per item. |
| Electronic current damage | Covers damage to insured property when part of it actually burns out because of artificially generated electric current. It doesn’t cover damage to lighting or heating elements, fuses or protective devices, or electrical contacts where sparking or arcing is normal in ordinary use. | $50,000 for one event. |
| Expediting costs | If a claim is paid to repair or replace insured property, this also covers the extra cost of express freight, air freight and overtime to speed things up. | $100,000 for one event. |
| Fine arts, antiques, works of art, rare books and curios | Covers items of rarity or artistic, historical or cultural value, such as paintings, carvings, sculptures, prints, tapestries, antiques, valuable rugs, porcelain, rare glassware, rare books and curios. After damage, the insurer may appoint a valuer or restorer to decide whether the item can be economically restored. If it is restored, the policy doesn’t cover any drop in its market value because it was damaged. |
85% share: full limit. 15% share: $75,000 for one event. |
| Hazardous substance emergencies | Covers charges that Fire and Emergency New Zealand is authorised to make to you for a hazardous substance emergency connected with your insured property. | $25,000 for one event. |
| Hidden gradual damage | Covers hidden, gradual water damage caused by a leaking internal water or waste pipe that you discover during the policy period. It also covers the cost of damaging or removing undamaged parts of the property to find the leak, as long as the insurer agrees first. | $20,000 for one event and $40,000 during the policy period. |
| Landslip | Covers damage from a sudden landslip or ground movement (falling, sliding or flowing). It doesn’t cover gradual movement, subsidence, soil erosion or damage from the sea. | $2,000,000 for one event. |
| Lost or stolen keys | If keys (or similar access devices or combinations) are lost, stolen or reasonably believed to have been copied without permission, this pays to change or replace the locks and keys, and to open a safe or strongroom if its key or combination is lost or stolen. | $50,000 for one event. |
| Machinery | Covers machinery that breaks down (for example, a part breaks, seizes or burns out because of a defect) and needs repair or replacement before it can work again. | $50,000 for one event. |
| Money – Section A |
Section A covers money while it is being transported in New Zealand, at your premises or work sites during business hours, or in a securely locked safe or strongroom outside business hours. If church offerings are lost before they have been counted, the payout is based on the average value of offerings over the previous 12 months, within the Section A limits. |
$100,000 at any one location or in transit, plus a further $100,000 for Christmas pay, back pay, seasonal payments or other extraordinary payments. |
| Money – Section B | Section B covers money at your premises outside business hours when it isn’t in a locked safe or strongroom, and money at the home of a director, executive officer or authorised employee. If church offerings are lost before they have been counted, the payout is based on the average value of offerings over the previous 12 months, within the Section B limits. | $5,000 at any one location. |
| Monuments | Covers monuments you don’t own, as long as they are on premises you own or occupy and you are responsible for their safety and maintenance. | $75,000 for one event. |
| Portable electronic equipment | Covers portable computers, laptops, mobile phones, electronic game equipment, portable music or entertainment systems and portable video equipment. Items less than three years old are settled on a replacement basis (where that basis applies). Older items, or items with no supporting documentation, are repaired, replaced with similar items in similar condition, or paid at market value, at the insurer’s choice. | $5,000 for each item in one event, up to $25,000 for the event. |
| Property not subject to the contract works exclusion | The policy normally excludes contract works (projects where property is being installed, built, demolished or tested). Works are only covered if their contract price or expected completed value is within the maximum shown here. |
20% share: maximum contract price of $2,500,000. 80% share: maximum contract price of $5,000,000. |
| Protection costs | Covers the necessary, temporary costs of controlling or reducing loss or damage that is about to happen and would be insured. It doesn’t cover permanent protection devices or systems. | $100,000 for one event. |
| Refrigerated goods | Covers goods in refrigerated cabinets or chambers that are damaged when the refrigeration stops or malfunctions, plus the cost of moving threatened goods to other storage. | $50,000 for one event. |
| Subsidence | Covers sudden and unforeseen damage when the ground beneath or next to a property sinks, slides, collapses or flows. It doesn’t cover landslip, soil compaction or erosion, normal settling of new buildings, or movement caused by the water table drying out. | $2,000,000 for one event. |
| Suspected loss or damage | If you have reason to suspect that insured loss or damage has happened, this pays the necessary cost of finding out whether it has. | $1,000,000 for one event. |
| Temporary removal | Covers insured property (other than stock) that is temporarily moved elsewhere on the same premises or to other premises in New Zealand, and while it is being transported there and back. ‘Temporarily’ means you intend to bring it back, for up to 3 months unless the insurer agrees otherwise. | $500,000 for one event, unless another amount is shown in the Schedule of Insured Property. |
| Theft of metal | Covers theft of metal at your insured sites. The limit applies to all losses at any one site. | $10,000 for loss at any one site. |
| Theft without violence, threat of violence, or violent and forcible entry or exit | Covers theft or attempted theft at your insured locations. This limit does not apply to theft involving violence, a threat of violence to any person, or violent and forcible entry to or exit from an enclosed building, enclosed yard, shipping container or locked vehicle. An enclosed yard must be fully enclosed by a security fence at least two metres high, with security gates fitted with a suitable lock. | $200,000 for one occurrence of theft. |
| Transit | Covers insured property (other than stock) while it is being transported within New Zealand outside your own premises, and between New Zealand ports. | $150,000 for one event, unless another amount is shown in the Schedule of Insured Property. |
| Transit of personal goods | Covers the personal goods of clergy and other employees while they are being moved because of a formal transfer to a new location in New Zealand. | $250,000 for one event, unless another amount is shown in the Schedule of Insured Property. |
| Unlawful substances | Covers decontamination of buildings you own after contamination from making, supplying or storing illegal drugs such as methamphetamine. This applies to accommodation you run (where a paying guest causes the damage) and to buildings leased to a tenant (where you have met the landlord’s obligations, such as checking references and inspecting regularly). It only applies when contamination is above Ministry of Health guideline levels. | $50,000 during the policy period, with a maximum of $10,000 for any one loss. |
| Unspecified locations | Covers insured property at any location in New Zealand that isn’t listed in your schedule of property values. | 5% of the total sum insured or $100,000, whichever is lower. |
Business interruption Special Limits
The Special Limts for Dependency, Prevention of access, Public authorities and Transport routes aren’t added together: only one of these limits applies to any one event.
| Type of Loss | What it means | Special limit |
|---|---|---|
| Dependency | Covers the income you lose if damage to a customer or supplier (in New Zealand or Australia), a port installation, railway warehouse or airport, or to the supply of water, gas, electricity, sewage or phone lines to your premises, interrupts your activities. |
10% of the total business interruption sum insured, up to $2,500,000 for one event. For example, if the sum insured is $385,000, 10% of $385,000 is $38,500. This is less than the $2,500,000 maximum, so the limit is $38,500. |
| Prevention of access | Covers the income you lose if damage to property within one kilometre of your premises stops you using or getting to them. | 10% of the total business interruption sum insured, up to $2,500,000 for one event. |
| Public authorities | Covers the income you lose if a public authority orders your premises to shut (fully or partly) because of damage, or imminent damage, to property within one kilometre; an injury or death on the premises; or pests or defective sanitation in the buildings. It doesn’t apply to shutdowns connected with infectious diseases. | 10% of the total business interruption sum insured, up to $2,500,000 for one event. |
| Transport routes | Covers the income you lose if damage to a port anywhere in New Zealand, or to a transport route, airport or railway within 10 km of your premises, interrupts your activities. | 10% of the total business interruption sum insured, up to $2,500,000 for one event. |
| Residential landlord — loss of rent | If a rental home you insure can’t be lived in because of damage the policy covers, this pays the rent you lose, for up to 12 months. You can claim under this cover or Alternative residential accommodation, but not both. | $20,000 for one event, unless another amount is shown in the Schedule of Insured Property. |
Insurance Renewal
Our policy renews on 1 Jan every year. If you require changes to your cover we need to know by mid-October. Please complete the renewal form even if you have no changes to make.
2027 Insurance Renewal Form - due 11 October 2026
2027 Insurance Review Workbook (.xlsx) (the password is the same as the Governance & Admin Centre, email insurance@anglicanmovement.nz if you need it)
Insurance Review Guide (.pdf)
Insurance Options Explained (.pdf)
AIB Loss Prevention Checklists
Contents Register Template (.xlsx)
Working out what to insure for Business Interruption
Explanation of Insurance Cover Options
Replacement/Reinstatement Value (RV)
This means your insurance coverage should be enough to cover the cost of demolishing your existing building, clearing the site, and rebuilding the same building as it was before if it gets damaged or destroyed. This includes covering professional fees and accounting for inflation in construction costs.
The value for this type of coverage is determined through regular insurance valuations, usually done every three years, to make sure your coverage amount is still appropriate.
Indemnity Value (IV)
Indemnity coverage is designed to put you in the financial position you were in just before a loss, taking into account wear, tear, and depreciation of your property. The coverage amount for Indemnity is usually much less than Replacement Value. It might be an option if you don't plan to rebuild your property exactly as it was, or if it's not possible to do so.
But there are some important things to consider:
Most claims don't result in a total loss, so if your property can be repaired, you might not get enough money to cover the full cost.
The maximum payout for partial or total loss is determined by the Indemnity value, and if your damage is repairable, you might not have enough coverage.
Demolition
This is the most basic level of coverage and only covers the cost of clearing the site if your property experiences significant damage or loss. It's important to note that minor damage that can be repaired won't trigger this coverage. It's typically used as a last resort after a major loss. The cost of demolition is also included in the Replacement and Indemnity values for each building.
No Insurance
You can choose not to have insurance at all, but you should carefully consider what might happen in case of loss or damage, especially regarding your obligations to stakeholders and parishioners.
Business interruption
Business Interruption is directly related to a building loss. For example, the kitchen caught fire and you are unable to use the building while the kitchen is being repaired. You have 3 groups that regular hire the building that can’t use it and therefore you are out of pocket for the amount of their rent. You would be able to claim for Loss of Rent for the period it was inoperable. So any event you can claim on for the buildings will be the same for business interruption, e.g. fire, theft, vandalism. In addition the following can apply:
Prevention of access by a loss or damage event that does not cause loss or damage to own premises.
Outbreak of human disease but excluding pandemic.
Failure of supplies – electricity, gas, coal, effluent disposal, water, telephone.
Closure of the area by Public Authority.
The costs may be for loss of revenue, loss of gross profit, loss of rents, the need to continue to pay wages and salaries, and costs involved in presenting a claim to the Insurers.
