Why you need business insurance

Making sure that your home and automobile are protected in the event of an accident is extremely important, and just as important is making sure that your business, customers and inventory is protected as well. Life can throw many curve balls at us and at any point in time could surprise us with something unexpected. Having proper insurance coverage will ensure that all aspects of our business remain safe and covered in the event of an accident.

What is business insurance?

Business insurance, while not mandatory in Canada, is insurance that can be purchased from an insurance provider that will protect your business in the event that something unforeseen occurs. It is important to have this coverage for both brick and mortar and at home or online businesses and it can significantly reduce the amount of loss incurred from theft or accidents.

What does business insurance cover?

There is a wide variety of different business insurance options available to suit all of your different needs as a business owner. Some of the most common types of business insurance include:

Property Insurance

This type of insurance will ensure that your business’s property, and everything inside it, is covered in the event of an accident, fire or due to theft. Property insurance will protect the building itself as well as equipment, inventory and furniture within.

Workers’ Compensation Insurance

If you have other employees working for you, then Workers’ Compensation Insurance is a must. This insurance will help to protect both your business and your workers in the event that someone becomes sick, injured or dies on the job.

Business Vehicle Insurance

Just as you would insure your personal vehicle, ensuring that your company vehicle is insured is a must as well. If your vehicle is being used to transport goods or services or to make a delivery for the business, then business vehicle insurance will protect against accidents and against any theft or damage to the goods inside.

Cyber Liability Insurance

Unfortunately cyber-attacks are becoming much more common, especially for small businesses. Cyber-attacks, ransomware and data breaches happen on a daily basis and if a company is not properly protected against such things, the business could incur substantial losses.

Professional Liability Insurance

In the event that a customer makes a claim that there has been negligence on the part of the business or business owner, Professional Liability Insurance, also known as errors and omissions insurance, will help to protect you. Your individual policy will be prepared by the insurance company, depending on the exact business you are running and the potential risks that could be involved.

Business Interruption Insurance

If your business has to stop running due to some type of catastrophic event, business interruption insurance can help you recover some of the lost income that this interruption will most likely incur. Having the right business interruption insurance in place, may mean the difference between being able to survive after a tragedy or having to close up shop for a period of time.

Product Liability Insurance

This type of insurance is especially important for those companies that specialize in manufacturing products. Product Liability Insurance will protect your business in the event that a consumer incurs damages or an injury somehow related to your product. Even if the strictest measures are taken to ensure product safety, it is always recommended to have a good product liability insurance policy in place.

Which type of insurance is best suited for my business?

It is highly advisable that all businesses, no matter what their size or what goods or services they are offering, have a comprehensive insurance plan that covers them for any unseen circumstance.  

To find out which insurance is best for your business, click here, or speak with your insurance provider for more personalized information.

What information do I need in order to obtain business insurance?

Prior to obtaining business insurance, make sure that you have a comprehensive list of all of the potential insurance needs that your business has. Make a list of all of the assets of your business, all of the inventory and equipment and all of the key data that is stored in your business’s database.

You will need to have financial information about your business, especially if you are planning to obtain any type of insurance that will protect you against loss revenue due to closure. You may also need to provide employee information if you plan on inquiring about worker’s compensation insurance.

Prior to contacting your insurance agent, make sure that you have your business name, address, registration number and all other applicable information about your business at your disposal.

Frequently asked questions about business insurance

How much does business insurance cost?

The amount that you will pay for business insurance will vary greatly depending on the size of your business and how comprehensive your insurance plan will be. A small business may only pay around $40 per month, while a larger business may pay hundreds or even thousands of dollars.

Does a home insurance policy cover a home-based business?

No. Your homeowner’s insurance policy will not cover any claims which are directly related to your business. Things like business inventory or business laptops or printers will not be covered unless you obtain a specific business insurance plan.

How do I get business insurance?

The best way to get business insurance is to contact an insurance broker or an agent at your chosen insurance company. Specialists in the field of business insurance can help you choose the policy that is right for you and your individual business needs.

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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.