Whether you are starting a new business in Ontario or have an existing business that is expanding, you will probably find yourself pushed against many hurdles. One of these hurdles will be finding a good insurance company and then qualifying for business insurance with the insurer. Throughout your quest for glory, you have probably found that there are several types of insurance policies required, before you can even begin performing certain activities. Of course, this seems like a hassle, but you will find that insurance can play a pivotal role in your day-to-day business operations.
Not only does it protect your employees, but it can protect your business and personal assets, as well. Below, you will learn the purpose of commercial insurance from a Canadian business insurance broker and how different policies can affect your business.
Commercial Vehicle Coverage Policies
If you own and operate a service business, it is likely that you have several company vehicles. You and your employees probably drive these vehicles on a daily basis all around town and out to customer’s houses. Even if your employees are utilizing their own vehicles on the job, it is possible that you as the employer may be held responsible in the event of an accident. As you can see, if you and your business depend on vehicles in order to get the job done, automobile insurance is absolutely necessary in order to avoid major risks. That being said, you should be aware of the fact that there are several different types of automobile policies available.
- Bodily Injury Liability Coverage– if you or one of your employees hit someone and cause bodily damage, this type of insurance will pay the victim’s medical expenses. In the event that you are sued over the incident this insurance will also cover your defense and court costs.
- Property Damage Liability Coverage– this type of insurance covers you and your employees, in the event that you cause property damage and are deemed responsible. It also pays for defense and courts costs if you are sued over the incident.
- Accident Benefits/Medical Payments Coverage– if you are driving with a passenger and that passenger is injured or incapacitated in an accident, this type of coverage will pay for your passenger’s medical or funeral bills.
- Collision Coverage– collision coverage insurance is a type of policy that will pay for the damages sustained to your vehicle in an accident.
- Comprehensive Coverage– this type of policy will cover any damages sustained to your vehicle that are not related to accidents or collisions. For instance, if your vehicle is stolen, or someone nails your vehicle with a crowbar, comprehensive coverage will pay for the damages.
- Uninsured Motorist Coverage– the road can be a dangerous place, and not every driver out there carries insurance, even though the law requires it. This is where uninsured motorist coverage can come in handy. It will cover your injuries in the event that you are involved in an accident with an uninsured motorist, or with a motorist that does not have enough coverage to cover the incident.
Workers Compensation Insurance
In January 1st, 2013, the Ontario government passed a law that requires all independent contactors to cover their employees with worker’s compensation insurance. Even if you just have one employee, you are required by law to cover them with worker’s compensation insurance. This type of policy will protect your employees in the event that they are injured on the job. The policy can pay for their medical costs, as well as their wages that are lost, while they are out of work.
One great thing about this policy is that it does not matter whose was at fault. The policy will cover the damages regardless. In the event that the employee dies due to the incident, this coverage will pay out compensation benefits to the employee’s family members.
Errors And Omission Insurance
If you are in a business that involves providing professional services to the public, error and omissions insurance is a must. For instance, if you are a lawyer and you direct your client to do something that ends up harming their case in the long run, they have the right to bring charges against you for misrepresentation. Or, if you are a heating and cooling contractor and install a gas line that leaks, resulting in an explosion, the customer could potentially seek financial reimbursement from you.
However, with errors and omissions insurance, you do not have to worry about any of this falling back on you, because it covers any incidents that results in financial loss to the customer. It will also pays for legal expenses in the event that you are taken to court.
Product Liability Insurance
If you are in the business of providing goods to the public, product liability insurance is something that you must always consider. Nothing in life can be completely certain at all times and sometimes people do silly things, or unexpected things happen. For instance, if you are in the cake baking business, you clearly list all your ingredients on the packages. However, if a customers consumes one of your cakes and is happens to be highly allergic to one of the ingredient, they are probably going to come after you for the medical costs.
In the event the individual dies the family might even try to bring a major lawsuit against you and your business. Product liability insurance can protect you in this type of situation and other similar situations. It covers all expenses including legal representation costs. However, product liability insurance will not cover any punitive damages.
Life Insurance
Every business wants to be successful and in order to be successful they are going to need good employees. Nothing attracts good employees like offering life insurance. When an employee is looking for life insurance through a company, you are almost guaranteed that they are looking to stay with that company for the long haul. Some companies even have the ability to offer their senior employees more coverage. For instance, some executives and CEOs may be crucial to the day-to-day operation of your business, and this entitles them to more coverage and benefits than the traditional employee. Once again, this is an excellent tactic that can be employed to attract top tier workers.
Now, as the business owner you can protect yourself with key executive insurance. If your business cannot function without a certain individual and he or she experiences an unexpected death, you are going to be in trouble. However, the key executive insurance will pay out revenue and losses that are required to train a new key individual to take over the responsibilities of your lost employee.
Theft
All businesses are at risk of theft, regardless if they are small or large. Most people you hire and customers you serve are honest, but there is always a bad apple in the crowd. You can install surveillance camera and security systems and still experience a theft. The only real protection you will have is general business insurance coverage. This coverage is designed to protect businesses from financial losses linked to theft. If you discover someone has stolen a low- or high-ticket item from your business, you will just need to file a claim with your insurer. After a brief investigation, the insurer will issue you a reimbursement check for the amount of money of that stolen item.
Burglary
Again, all businesses are at risk of theft, as well as burglary. Believe it or not, some businesses have experienced large financial losses related to burglaries. When someone unlawfully gains entry into your business and steals several high-ticket items, you will be protected, as long as you are covered with general business liability insurance. This coverage will protect you from all burglary-related financial losses.
Burglaries occur every 60 seconds in the Canada, including residential and commercial properties. Whether you sell heavy equipment, lawnmowers or grills, your business will be at risk. Several decades ago, businesses could leaves these items on display outside their store without worrying about them getting stolen. Today, businesses have to transport the smaller items outside, when they open and inside at closing.
To prevent such losses, you should obtain general liability insurance. Then, when such an incident occurs on your property, you can file a claim and be reimbursed for those losses. This is the only true protection option businesses have, when it comes to burglaries.
Embezzlement
Another risk that all business face is embezzlement. This risk is slightly different than burglaries and thefts, because they tend to be related to an employee, attorney, financial advisor or accountant. All of these professionals can embezzle money from you without you finding out for many years. With general liability coverage, you will be protected from embezzlement-related losses.
Many companies have experienced embezzlement, leading to hundreds of thousands of dollars in losses. These financial losses have forced some of those companies into bankruptcy, because they were not insured. It is a fact that if you do not obtain general liability insurance before or soon after you open your business, you could find yourself facing the same issues. This type of coverage may or may not be a requirement for Ontario businesses, but they should definitely give it some consideration.
Third-Party Injuries
If you operate a business that is frequented by customers and other individuals, you will be at risk of a civil lawsuit associated with third-party injuries. Anyone who walks onto you property and becomes injured will have the right to file a lawsuit against your company. In most cases, the jury or judge will find in the claimant’s favor, especially if they have enough proof to justify their case. Lawsuits such as these have caused companies to shutter, regardless of their business tenure.
Instead of allowing the incident to end up in court, you can utilize your commercial liability insurance to cover the individual’s hospital bills. If you are not covered by commercial liability insurance, you will end up spending out of pocket. You can contact, Aviva, Lloyds of London, Chreechurch, or Encon to speak with an agent about this type of insurance coverage. Act now before it is too late, because anyone can walk onto your business premises and get injured within a moment’s notice.
Theft Of Trade Secrets
Every company has trade secrets that they have utilized since they opened. This information is extremely valuable, but sometimes they have to entrust an employee with it. When an employee, such as a chief executive officer, general manager or president, steals your trade secrets, you could end up facing bankruptcy. The damage will be so great that your business may never recover. To protect your business from such tragedy, you should consider obtaining fidelity insurance. This type of coverage will protect you from financial losses related to the damage caused by a dishonest employee. Commercial insurance is a necessity for these very reasons.
Fidelity insurance covers technology risk, asset protection, external fraud and unauthorized activities on part of an employee. All of which, can ruin your business. Almost every company carries this type of insurance, because there is always a risk.
Other frequently asked questions about business insurance
- How much does this insurance Cost?
- How to qualify for this insurance?
- Which Canadian insurance companies offer CGL?
- How does a commercial liability insurance claim work?
- How do I apply?
- How long does it take to get this insurance?
- What are the different categories of commercial insurance?
- What are the mistakes that can be avoided?
- The basics and essentialities of this insurance
