Do I Need Business Insurance in Canada?
Your business may be subject to several common business risks, making it vital to have the proper coverage and risk management plan in place to reduce exposure. So, do you need business insurance in Canada? Even if business insurance is not mandated by law in Canada, the proper business insurance plan can protect you and your business (small or large) from identified risks.
What is business insurance?
Every business is unique, and so are the types of coverages they need. Business insurance is a general term that describes several policy types that protect business owners against risk. In the event a business finds itself exposed to risk, insurance can provide financial assistance to help with damages or losses. This includes the cost of repairs or compensation for the loss.
Though the insurance needs of each business will vary, below are common policies included in a business insurance plan:
Business interruption insurance coverage can help cover profit and ongoing expenses during repairs to help tie over the business until reopening operations at the same level of operations before the loss, or until your 12-24 month period of indemnity is exhausted, whichever comes first. Business interruption insurance can help weather the storm in the event of a loss where business could not continue as normal for some time, and there is an essential tie-in to the business’s physical location.
Contents insurance can protect your business’ belongings. This includes things like tools or furniture, in the event, they are lost, stolen, or damaged by external factors (i.e. a flood.)
Cyber insurance can protect your business against damages incurred during a cyber attack. This includes computer attacks, cyber extortion, identity recovery, data compromise liability, network security liability, and electronic media liability.
Errors and omissions insurance is designed to protect various professions when they’ve made a mistake or wrongful act that results in financial harm to the people those professions serve. The specifics of each policy vary, depending on the occupation. Examples of people who might consider Errors and Omissions Insurance include but are not limited to real estate brokers, engineers, software developers and attorneys.
General liability insurance may cover you against claims for bodily injury or property damage to others arising from your business activities or on your property. An example of general liability insurance is if a client visits your office and slips on a wet floor. If seriously injured, the client may sue your business for compensation.
Do I need business insurance in Canada?
In Canada, laws do not mandate that business insurance is a requirement to operate unless it is for a commercial vehicle. But, and it is a BIG but, it is very highly recommended. It is within every business owner’s best interest to invest in solutions to support and protect your business as it grows.
Even small business owners, such as independent contractors or those operating out of the home should still consider an errors and omissions policy. Additionally, if you operate your business out of home, it is wise to consult with your insurance broker to determine what is and is not covered under a standard homeowner’s policy. And review your coverage as you grow. Because as your business grows, so does its risk exposure. Having your business properly insured helps protect what you have worked so hard to build.
Should you get insurance for your business?
Businesses large and small know that the bottom line matters. While business insurance is an additional fee, its cost may save you thousands in legal fees, financial repercussions, and detriment to your public reputation in the long run.
Discuss the benefits of business insurance with your insurance broker. They may help to assess your business needs and identify the industry-specific risks to your business is exposed to. At Gifford Carr that is what we do, we work with our commercial clients as risk management advisors – protecting what matters most to them and their business.