One in four small and medium-sized firms do not have insurance cover for their businesses, putting assets and employees at risk.
Research released by Vero Insurance today reveals the cost of insurance and the perceived lack of benefits as the main reasons for many not having insurance.
This is particularly pertinent as the nation picks up the pieces after the fourth storm of the year.
• Read more: Insurers flooded with client calls after storm hits
All the major insurance companies have a reported an uptick in claims today, none more so than AA Insurance, which said it received a week's worth of calls in a day.
Suncorp New Zealand customer marketplace general manager Campbell Mitchell said insurance was commonly seen as a "grudge purchase", but the risk of not being insured could be crippling for small firms.
Research findings, based on a survey of more than 900 small and medium-sized firms, found 23 per cent had no recovery plan in place if something was to happen.
"One of the concerning findings from this part of the research is many SMEs with no insurance simply aren't sure what they would do if something went wrong," Mitchell said.
"Thirty-one per cent of the SMEs we spoke to thought their business might shut down if a major negative incident occurred.
"Previous disasters have shown larger events can have a disproportionately severe impact on small businesses, which in turn can affect local economies."
Fifteen per cent of SMEs said they would self insure if something was to happen and 3 per cent would get a bank loan.
Of the businesses owners who do have business insurance, 38 per cent said they were concerned about the risk of not being able to trade for an extended period of time, and 26 per cent were concerned about a key employee taking time off.
Twenty-four per cent of those with insurance said they were worried about cyber attacks and 23 per cent were worried about natural disasters.
Insurance Council of New Zealand chief executive Tim Grafton said it was essential for small businesses to be insured.
"We've gone through a couple of very significant earthquake events over the past seven years which just shows how vulnerable the country is to catastrophic natural disasters, which can have a significant impact on businesses," Grafton said.
"If you look at what happened in Christchurch, more than 1200 commercial properties in the CBD were red-zoned off for the best part of two years and much of the CBD demolished so if you were a business owner operating there without insurance you would have been in a very powerless position."
Over $1 billion of insurance cover was injected into the Christchurch business community during that time, Grafton said.
"Cash-flow is on a month-to-month basis for many small businesses and they can't afford to survive for long without it, so the benefits of insurance are to provide cashflow in so you can keep people employed," he said.
"Aside from catastrophic events like earthquakes, these days a lot of business is conducted online... which again, put firms at risk and cripple a business."
Small and medium-sized firms contributed $232 million to GDP last year.