Business insurance is a type of policy that provides coverage to business owners in the event of loss from unexpected events, such as property damage, theft, or on-site injuries. Without a business insurance policy in place, your business could suffer enormous financial loss that can force you to shut your doors forever.
No matter how big or small your business is or how long you’ve been in operation, having a business insurance policy in place is critical.
Types Of Business Insurance
Every business is different, which is why it’s important to have your insurance policy customized according to your exact needs. Luckily, there are several types of business insurance available to help ensure that you get the coverage needed to best suit your business.
Commercial Property Insurance
If you have a physical property, then a commercial property insurance policy is needed. This type of policy will provide coverage for the actual structure of the building, as well as items within the buildings, such as equipment and inventory. Your policy will cover you for unforeseen events like fire, theft, vandalism, or flood.
If you operate your business from home, you will still need a commercial property insurance policy, as your home insurance policy will not provide coverage for your business.
General Liability Insurance
This type of insurance will cover you against any potential litigation against you in the event that someone is hurt while on-site, whether a staff member or customer. It will also provide coverage for any damage done to your storefront or warehouse. Any legal costs associated with lawsuits against you will be covered with this type of insurance policy.
Professional Liability/Errors And Omissions Insurance
Any consequences that arise from your services or advice will be covered with a professional liability or errors and omissions insurance policy. For instance, if you are a lawyer that has given poor advice to a client that results in major financial loss or even incarceration, any damages resulting from a lawsuit against you would be covered with this type of policy.
Commercial Auto Insurance
If your business depends on a vehicle to some degree, then you’ll need a commercial auto insurance policy. This type of coverage will protect you against damage or theft of your car, as well as any liability on your part in the event that you damage another person’s car with your vehicle.
Cybersecurity Liability Insurance
Most likely, some part of your business operates online. That means that some of your business information — as well as that of your customers — is on the world wide web and vulnerable to hacking. Unfortunately, “cyberattacks” are on the rise, and they’re affecting businesses both large and small.
With cybersecurity insurance in place, you’ll be covered in a variety of ways. For example, it may cover the cost of credit monitoring, legal fees, and even ransom money when valuable data is held hostage.
Directors And Officers Liability Insurance
It’s possible that not only are your business assets at risk but so are your personal assets. In a directors and officers liability claim, your personal assets may be vulnerable if you are the person in charge of your business.
Many people can choose to sue you, including employees, customers, vendors, and even government officials. But with a directors and officers liability insurance policy in place, you’ll be covered against these exorbitant fees.
Crime Insurance
This type of insurance protects your business from a staff member who steals from you, slanders your company, misrepresents your company, or maybe a security risk.
Key Person Insurance
Every business has a person or persons who play a key role in the health of a business. If that person passes away or becomes incapable of continuing in their role, this could put the health of the business in jeopardy. A key-person insurance policy will provide coverage for any losses that stem from an interruption of business operations as a result of the loss of a key player.
Business Interruption Insurance
This form of insurance will replace a portion of income in the event of a loss in revenue if business operations are interrupted. While you work to get your business back up and running again, a business interruption insurance policy will fill in the financial gaps.
Best Insurance Providers In Canada
| Types of Business Insurance Available | |
| Allstate | Commercial General Liability Insurance Commercial Property Insurance Professional Liability Insurance Cyber risk & data breach |
| Co-operators | Buildings, contents and stock Equipment Breakdown Protecting your revenue Insurance for co-operatives Insurance for non-profits Liability Crime Coverage Rainproofing checklist Farm insurance |
| Aviva | Property and liability Commercial auto Contract and Commercial |
| RBC | Business Overhead Expense Key Person Buy Sell |
| Intact | Mobile property Commercial general liability Commercial vehicles Surety bonds Errors and omissions Commercial property Commercial general liability Commercial vehicles Privacy breach |
Factors That Affect The Cost Of Your Business Insurance
How much does a business insurance policy cost? The answer to that question will depend on a number of factors, including the following:
Coverage Amount
The more coverage you think you will need, the higher your premiums will likely be. So, a $10 million policy will likely cost more than a $5 million plan.
Size Of Your Company
Generally speaking, a bigger business usually means there’s more at risk. This applies to the actual physical size of your business headquarters where you operate, as well as the number and value of all your business assets. The more you have, the more expensive it will be to insure it all.
Revenue
The more revenue your company generates, the higher the cost of business insurance.
Number Of Employees
You will be exposed to more liability with a larger team of employees. There’s an inherent risk that comes with having people on staff and on-site, and with greater risk comes a more expensive insurance policy.
Location
Insurance policies vary in cost based solely on location. This is applicable not just to business insurance, but also to other types of insurance, including car insurance and home insurance.
Business Industry
Certain industries come with more risk than others. For instance, a construction company has a higher risk of experiencing injuries among employees compared to a retail clothing store. As such, business insurance policies will vary in cost depending on the industry.
Deductibles
When you file a claim, you’ll first need to pay a deductible before your policy kicks in. You can choose the deductible amount to pay. Generally speaking, a higher deductible means lower regular premium payments.
Claims History
A history of claims might mean you’re more of a risk to your insurer, which could translate into higher insurance costs to have a policy in place.
Additional Reading
Business Insurance FAQs
How much does business insurance cost?
Can business insurance be written off as an expense?
Is business insurance mandatory to run a business?
Final Thoughts
If you run a business or are just starting to get one up and running, you’ll want to have a business insurance policy to accompany it. There is so much at stake with a business, and considering how hard you have worked to run your company, you don’t want anything to happen that can throw a wrench in it. A business insurance policy can protect your business from any unforeseen issues that may come your way.
