Small Business Insurance in Canada.

The world of small business is both vast and diverse, so when it comes to insurance, there is no ‘one-size-fits-all’, unfortunately. However, we do have some good news – all businesses, whether big or small, need to focus on very specific risks that threaten the livelihood of their operations, and we’ve narrowed it to two broad categories: liability and property.

Let’s talk about them!

The first and debatably most important risk that can jeopardize a business is their exposure to liability. This is when a company, or one of its key members, can be blamed for someone’s injury, or for damaging someone’s property. Liability coverage is a cost-effective way to safeguard a business from claims made, and judgements won, that cause financial harm to the company.

Despite liability coverage being very important, most small businesses come across the need for this coverage when they are awarded a large contract, or when they sign a new lease – in both scenarios, the other corporation will require proof of insurance to complete the transaction. This is simply a way for them to ensure that their new business partners are in a protective state. There are many types of liability, such as professional, directors and officers, and general, so its important to speak with a specialized broker who can understand your needs and direct you accordingly.

Now that we’ve covered the main concern, let’s talk about the second and final risk we need to have protection against – commercial property.

Just as people insure their home and belongings on a personal level, it’s important that a business does the same. Generally speaking, a small business will have many different items to consider protecting. If you are a dental office, you will need to cover the expensive x-ray machines, the dental chairs and all the extensive equipment, whereas a spin studio will simply want to cover all their stationary bikes. The property risks will be different from business to business, but the concept is the same – if you have property that is vital to the revenue and operations, then it should be insured.

As we discussed above, liability coverage often comes up as companies expand through new leases or awarded contracts, and commercial property insurance is usually recognized in a similar fashion. Most small business owners will add property and equipment coverage to their liability policies because they have leased new equipment, or possibly have secured a mortgage on a corporately owned premises. In either case, the other party will want to verify that they have the appropriate coverage in place.  

Regardless of how small business owners find out about property and liability coverage for their respective businesses, the fact remains - without it, they are unnecessarily exposing their companies to avoidable financial harm.