Getting the right insurance for your small business8 min read

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insurance coverages
6 minute read

Running your own small business can be an exciting but daunting adventure, no matter what kind of business you run. From organizing your store, to meeting client deadlines, you’ve got a lot of responsibilities to balance. With so many things on the go, you’ll be exposed various risks along the way that could harm your business, and your pocket book. They may not be large risks, either. An incorrect label on your product or a leaky pipe in your store can go unnoticed for a while, but they can also have a huge impact on your day-to-day operations, not to mention your bottom line.

Protecting the business you’ve worked hard to build.

With all of the time, money and effort you’ve invested in starting and building your small business, it’s that much more important that you have a plan in place to protect it. Getting the right insurance for your business is a great way to protect yourself from expensive losses. But with so many different options available, you may not be sure what type of insurance is right for your particular business.

To top it off, researching your insurance needs can be time-consuming, tedious, and…well, boring. But don’t worry! We’re here to give you a quick, concise, and easy-to-understand breakdown of some of the insurance coverages you might need for your unique business. Whether you provide a service, work with your hands, or sell things, we’ve got the lowdown on what insurance coverages are the right fit for your small business.

What should you insure?

To figure out your business insurance needs, you should evaluate three key areas of your small business: your property, your operations, and your bottom line. Certain areas may need more protection than others, depending on your business. To save you time, we’ve outlined some of the most common insurance coverages that can help you protect these three key areas of your business.

1. Your property

Do you have a storefront or workshop for your small business? Do you drive a vehicle for your small business? Do you run your small business from home? These are all questions to ask yourself when evaluating your business insurance needs. Here are the main types of insurance coverage you should consider for protecting your property:

  • Commercial property insurance: This coverage can help protect your small business property, such as a storefront or a workshop. It includes protection for any contents inside your building, including equipment, electronics, furnishings, and inventory or supplies. If you own a bakery and your electrical oven gets destroyed by a fire, this coverage can help keep the replacement costs low. It may also covers items outside of your building, including signage, fencing and landscaping. If someone vandalizes your sign out front, this can help cover your repair costs.
  • Commercial auto insurance: If you or your staff drive vehicles as part of your day-to-day operations, you’ll want to make sure you have commercial auto insurance. Whether you’re an electrician driving from site to site or a florist delivering beautiful bouquets, this coverage can help cover damages to your vehicles and injuries to your staff. If you’re using your personal vehicle, you should know that your personal auto insurance policy may not fully protect your vehicle when it’s being used for commercial purposes. For example, if you have any decals on your personal vehicle that promote your company, you likely won’t be covered by your personal auto insurance policy.
  • Home-based business insurance: Do you run your small business from home? If so, your home insurance policy may not be enough to protect your business assets. For instance, it won’t cover any business-related equipment, so you’ll still need additional contents coverage to ensure those items are protected in the event of a loss. Home-based business insurance can help cover things such as damaged equipment, stolen inventory, and customer slip-and-fall accidents that happen at your home. If someone visits your home and steals your

2. Your operations

Someone slips and falls on your property. A product you sold to a customer is faulty and causes an injury. You unintentionally used a trademarked slogan in your client’s new advertising campaign. These are common scenarios that could result in costly lawsuits – all of which can be covered through different forms of liability insurance. Here’s a breakdown of the main insurance coverages that can help protect your business’ day-to-day operations:

  • Commercial general liability insurance: Also known as CGL insurance, this is the foundation of your business insurance policy. It helps protect your small business if it’s found liable for an injury to a customer, supplier, or other third party. If a customer walks up the steps to your store and slips, they could file a liability claim against your business for their injuries, even if your steps are perfectly climbable. This coverage is important to have, as falling is the leading cause of injury-related hospitalization in Canada. This coverage can also protect your small business if you (or your staff) cause damage to a third party’s property, whether it happens on or off your premises. If you run a catering business and spill an entire pot of chili on a client’s white carpet, this coverage can help you cover the damages you may face from a lawsuit. CGL insurance is essential for all types of small businesses.
  • Product liability insurance: This coverage can help protect your small business if it’s found responsible for producing or selling a product that causes bodily injury or property damage to a third party. Whether the product has a design defect, a manufacturing defect, or a marketing defect, these issues can lead to costly lawsuits for your small business. If you sell a kitchen appliance that accidentally causes bodily injury to a customer, this coverage can help protect your business from any resulting lawsuits. If your small business makes and/or sells a product, you should consider having this type of coverage. Product liability is typically included in most CGL policies, but it’s always best to double check!
  • Professional liability insurance: This coverage can help protect your small business if a client files a lawsuit against you as a result of your work. This could include if you don’t deliver to a client on time, if your work causes your client financial loss, or if your work has mistakes in it. If the website you designed for a client doesn’t function properly, this coverage can help cover the costs if the client files a lawsuit. If your client suffers a loss because they believe your service failed to meet expectations, you could also face a costly lawsuit. If your small business provides any type of service for a fee, you should consider having this type of coverage.

3. Your bottom line

Unexpected losses can come in many forms. For some small business owners in Hamilton, Ontario, this recently came in the form of vandals causing an estimated $100,000 worth of damage to their business premises. Scenarios like these may force you to temporarily close up shop. While your net income stream could stop or be greatly reduced while you take care of repairs, your bills, payroll, and other ongoing business expenses would start to pile up quickly. There is, however, insurance coverage available that can protect you and your bottom line from financial loss.

  • Business interruption insurance: This coverage can help you cover your bills and expenses when your business can’t generate income, helping you stay afloat when unexpected interruptions occur. Let’s say a fire on your property forces you to close your doors until repairs can be made or a new location is found. Business interruption insurance may reimburse you for any lost business profits and businesses expenses required to help you run your business until you’re able to get it up and running again.

How do I decide what insurance coverages my business needs?

It’s important to remember that every business is different and requires a different policy to protect it. Even with the concise outlines above, deciding what exact coverages your business needs can be overwhelming. Lucky for you, our online estimator can help. If you’re wondering what kind of coverage you need and would like an estimate on how much it may cost, just answer some online questions about your small business. Our small business specialists are also available by phone at 1.844.429.9480.

 

Want to learn what protection your business needs?
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This blog is provided for information only and is not a substitute for professional advice. We make no representations or warranties regarding the accuracy or completeness of the information and will not be responsible for any loss arising out of reliance on the information. Terms, conditions and exclusions apply to coverage. See policy for details.