3 Types of Business Insurance Every Small Business Needs

Published On: April 11th, 2022Categories: Commercial Insurance

What’s one thing that Canadian businesses have in common? They all need commercial insurance.

If you’re ever stuck dealing with the aftermath of a fire or a pipe burst in your building, your policy can make a world of difference. But with so many different types of business insurance available on the market, it’s not easy to tell if you’re making the right choice for your company.

Wondering what insurance policies you should be looking at? You’ve come to the right place.

We’ll give you a list of three non-negotiable commercial insurance types that every business should have. And then we’ll give you our advice on choosing a policy.

Keep reading to learn more about how you can use commercial insurance to protect your business and your livelihood.

1. Commercial General Liability Insurance

Commercial general liability insurance is designed for situations where a third party suffers personal injury or property damage because your business has made a mistake. Some scenarios where this might apply include:

  1. A subcontractor cuts down a tree that lands on a neighbour’s property.
  2. A customer breaks a leg after slipping on an unmarked wet floor in your store.
  3. A kid wanders onto your worksite and is seriously injured while playing with your company’s industrial-level equipment.

Between laptops, smartphones, clothes, and glasses, even simple accidents can cost your business a lot of money. And when you factor in the cost of lawsuits and legal fees, you could be on the hook for even more.

General liability insurance can cover both the judgment costs and legal fees associated with liability claims. In addition to this standard coverage, many business liability insurance policies may also cover false advertising claims and damage done to rented property. For these reasons and more, commercial liability insurance is typically a must-have policy for Canadian businesses. 

2. Commercial Property Insurance

If a fire broke out in your building tomorrow or your worksite was targeted by thieves, how would your business replace all of that damaged and destroyed equipment?

Most people know that it’s time to get a new fridge at around the 15 to 25-year mark. And with business equipment and inventory, you can often plan and save for your upgrades.

But in the wake of a natural disaster, you don’t necessarily have the ability to prepare ahead of time. And because office furniture, expensive tools, and industrial equipment are all expensive, the cost of replacing everything on short notice could strain your company’s finances.

Commercial property insurance makes it possible for you to protect your company’s assets. As such, businesses in need of commercial insurance in Canada are often advised to take out commercial property insurance.

3. Cyber Insurance

According to the Government of Canada, 21 percent of Canadian businesses had problems with cybersecurity in 2019. And if that wasn’t shocking enough, businesses spent $7 billion dealing with the detection and aftermath of those same incidents.

Now more than ever, companies are relying on the cloud to conduct business. If you’re accepting online payments, storing customer information in an online database, or dealing with sensitive corporate data, you’re one vulnerability away from a major data breach.

As a company, there’s no question that you spend a lot of time keeping your data secure. But in a worst-case scenario, cyber insurance can give you the financial wherewithal you need to navigate the situation. For these reasons and more, cyber insurance is becoming a necessity for many Canadian businesses.

Business Insurance Tips and Tricks

Let’s assume that you’re taking out commercial insurance, but you still want to make sure that you’re getting a good deal. Here are some common business insurance mistakes to avoid at all costs:

1. Being Underinsured

Most businesses don’t operate without insurance — the issue is that they don’t have enough coverage. And it happens more easily than you might think. 

Maybe you upgraded your office and you forgot to update your policy. Or perhaps your policy is from a few years ago and you never thought to update it. Either way, it’s important to speak with a broker to make sure that your commercial insurance policy is up to date. 

2. Not Understanding Your Risks

When you’re looking at the consequences of being underinsured, you might be tempted to take out every policy you can get your hands on. But here’s the problem with that:

Having more insurance doesn’t necessarily mean that you have better insurance.

If you own a home-based business, for example, you probably don’t have to worry about the company vehicle being involved in a collision. As such, a commercial vehicle insurance policy probably won’t do anything except increase your monthly costs unnecessarily.

3. Not Being Up-to-Date

During the COVID-19 pandemic, the rising cost of lumber made a lot of commercial buildings more expensive to replace. If a company had the bad luck of getting hit by a tornado or having their building burned down, they would have learned the hard way that they didn’t have the right insurance for their needs.

We recommend that you schedule annual meetings with your insurance provider to discuss your needs. You might need to take out an industry-specific insurance policy like the trucking insurance we have for owner-operator truckers. We’ll be here to answer any questions that you might have.

What Types of Business Insurance Do You Need?

In order to protect your business, you need commercial insurance policies that you can count on. To that end, the types of business insurance we’ve listed are just the tip of the iceberg.

Contact us to discuss your commercial insurance options today.

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Written by:

Kyle Paterson
Kyle believes that insurance is a tool, when powerfully leveraged best ensures the vision of business leaders and families are realized. Kyle focuses on cyber risk transfer, group benefits, and corporate and individual life insurance solutions.

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