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Big or Small, All Businesses Need Business Insurance

by admin

You’ve poured everything into building something from the ground up, and whether you have 20 employees or 2, your business needs insurance. Business insurance helps protect against legal and financial liability in the event of accident, theft, or damage. Unfortunately, far too many small business owners in Canada don’t have sufficient insurance coverage – or lack coverage altogether – leaving them open to potentially devastating losses.

Clearly, business insurance is essential, but how much coverage is enough for your small business?

Evaluating Your Business Insurance Needs

Several factors determine how much insurance a business needs. There’s the type of business and years of experience, the number of employees, annual gross revenue, and location, to name a few. Then there’s the type of coverage you need.

Out of the dozens of products available, there are eight types of business insurance most commonly used by small businesses. These include:

• Commercial General Liability – If you’re only going to take out one type of insurance coverage, it should probably be a commercial general liability policy. CGL protects from the two most common claims against small businesses: property damage and injury.
• Business Interruption Insurance – When operations can’t continue due to a major loss (like significant property damage), business interruption insurable helps to ensure you have the financial ability to fund your recovery, pay your bills, and cover other expenses.
• Product Liability Insurance – If a product you sell causes physical harm, or property damage, or is found to be faulty, you could find yourself on the receiving end of a lawsuit. Product liability insurance ensures you have the financial means to protect your business.
• Professional Liability Insurance – For businesses that provide a service, professional liability coverage provides protection from lawsuits related to errors and omissions in your work that result in financial loss for the client.
• Cyber Risk Protection – In an increasingly digital environment, small businesses make particularly attractive targets for hackers because they often lack the sophisticated protection of larger companies. Cyber risk insurance protects from the financial fallout of cyber security breaches.
• Equipment Breakdown Insurance – If your business relies on expensive or difficult-to-replace machinery, equipment breakdown insurance is something you may want to consider purchasing. If a crucial piece of equipment breakdown, you will be covered for its repair or replacement costs.
• Commercial Property Insurance – The building your company operates from can be a crucial part of your business; ensure it and its contents are protected from loss or damages with commercial property insurance.
• Commercial Auto Insurance – whether you operate a commercial fleet or regularly use your personal vehicle for business-related activities, you need to have a commercial auto insurance policy. Personal auto insurance does not extend to commercial vehicles, leaving your business exposed and unprotected.

Ways to Save on Business Insurance

While insurance premiums are individual and difficult to estimate, Canadian small businesses spend on average between $400 and $1,000 per month on business insurance, including commercial general liability coverage.

This may seem like a significant amount, particularly for small businesses just starting out, but having adequate protection is better than the alternative – not having enough insurance. And there are ways you can help reduce your premiums without affecting your coverage:

• Work with an insurance broker; let someone with industry experience shop around and compare prices and policies for you
• Review your business insurance regularly. Business insurance needs change, and you may find yourself with more or less insurance than you need. Mark a date to review your insurance policy annually with your broker
• Choose a higher detectable, keeping in mind this is the amount you’ll be left to cover in the event of an insurance claim
• Ask about bundle discounts. If you are combining more than one type of business insurance, ask your broker about discounts that you might qualify for

Business insurance helps provide peace of mind and safety in knowing that the company you built is protected from the unexpected.