What Type of Business Insurance Do I Need?

What you choose in business insurance protection depends on the type of business you operate. Therefore, business insurance packages cover various types of business needs. The following information will help you make a more informed decision when choosing business-based insurance products and packages.

Common Types of Business Insurance

Many business owners ask, “Do I really need business insurance?” Business insurance protects owners from losses related to unanticipated events that may occur during their daily operations. The protection extends to third-party property damage, errors and omissions made on the job, and bodily injuries. To select an insurance, you need to consider your business’s size, industry and revenue.

How to Get Started

As a general rule, you should use insurance to protect your business against lawsuits or damages, or events that you cannot pay for yourself. Therefore, the term, “business insurance,” represents an umbrella term that refers to a bundle of policies that apply to a business. The common types of business insurance include general liability insurance and professional errors and omissions coverage. When you select coverage for your Canadian business, you should start with commercial general liability and build from there.

Commercial General Liability Coverage

General liability insurance, which should be used by all businesses, typically covers injury claims and property damage experienced by third parties. The other insurance products your company chooses will be based on its size and risks. To make sure you cover yourself well, you need to have a risk assessment done for your business first.

Getting the Insurance You Need

Let’s look how business insurance can provide protection for your specific business. We will begin by seeing what insurance coverage you should get for a small-sized business start-up to a medium enterprise. This protection should include –

  • Property insurance for protecting buildings, inventory, and equipment at your site, as well as for covering utility services, exterior building glass, and signs. Extensions of coverage should include environmental upgrades, business contents away from the business site, valuable papers, and accounts receivable.
  • Liability coverage that protects you from third-party complaints for bodily or mental injury, property damage, advertising claims, tenants’ property damage, medical payments, non-owned autos, or damage to rented autos.

You should also include insurance for equipment breakdowns or crime. Again, what you ultimately choose will be based on what you find out when you have a risk assessment performed.

Here’s a complete overview of everything you need to know about business insurance, starting with a list of reputable providers!

What Sectors Are Covered

When you choose insurance coverage, it should be designed to cover the specific needs for your business or industry. Insurance protection is designed to support the coverage needs of 7 primary sectors in Canada. These sectors include the following classifications.

  • Real estate and construction
  • Manufacturing and industry
  • Technology and telecommunications
  • Food and beverage
  • Health and the public sector
  • Distribution and wholesale companies
  • Retail

You cannot operate any type of business without business insurance. Otherwise, you stand a good chance of shutting down overnight.

Professional Errors and Omissions Insurance

Business insurance also includes errors and omissions insurance for professional people. This insurance covers you, for example, if you work as an attorney, accountant, or other professional, and get sued for making a mistake while performing your professional duties. This coverage is also called E&O insurance.

Commercial Auto Coverage

Business insurance is designed to cover your needs, as well, for commercial auto coverage. Whether you have a fleet of vehicles or one van, you should make sure you have the proper coverage. Commercial auto insurance covers the cost of accidents that involve a business-owned vehicle. You can also use the insurance to cover vehicle theft, certain types of vehicle damage, and vandalism.

Frequently Asked Questions About Business Insurance

When is Commercial Auto Insurance Required?

You should get commercial auto insurance for vehicles used for your business, driver’s training, or public use, such as school buses or public buses. You also need the insurance if you run a taxi service. Buying commercial auto insurance is also required if you have employees who serve as couriers or delivery drivers.

How does property damage insurance cover my business?

Property damage insurance covers your inventory, building, equipment, and computers. You can avoid loss or damage to your business’s physical assets from fire, theft, and vandalism with the protection.

How does casualty insurance work in business settings?

Casualty insurance covers bodily injury and property damage to people and their property who use your products or visit your facilities.

How do I protect myself from product liability claims?

Besides getting property and casualty (P&C) business insurance, you should also make sure that your quality control process is comprehensive. The products you manufacture should also include warning labels, if necessary. By implementing these additional safety measures, you will also spend less on your insurance.

Why should I buy insurance protection for equipment breakdowns?

By insuring your equipment against breakdown, you can cover maintenance problems with your HVAC system, point-of-sale (POS) equipment, or pressurized machines, all which could interrupt your business operations if they stop working.

What specifically can I cover with business crime insurance?

Business-related crimes can be covered by insurance under the following categories:

  • Employee dishonesty
  • Counterfeiting
  • Forgery
  • Electronic fraud
  • Forgery of incoming checks
  • Crimes against a customer’s property
  • Costs incurred by a business-based robbery

What you choose in insurance coverage, in this area, will be based on what you find out after having a risk assessment performed.

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Amanda Leach

Fifteen years can be a long time to work in one industry, but not when you are doing something that you love. Amanda has enjoyed the freedom of working as a freelance writer for the majority of her career. She has successfully combined her passion and skill for writing while still enjoying a life filled with travel, learning and exciting new experiences. While she loves exploring all different types of writing, her PhD in Consumer Psychology has made her a sought after writer for marketing, business and technology fields. Amanda is a regular contributor to Smarter Loans.