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Business insurance is an important part of running a company. Whether you’re a small start-up or an established enterprise, having the right insurance can safeguard your business from unexpected events such as lawsuits, property damage, or operation interruptions. This page is written to provide you with all the information you need to know about getting business insurance in Canada, including why it’s important, the types of coverage available, and who needs it.
Getting insurance for your business is not legally mandatory in Canada, but it is highly recommended for any business, regardless of size or industry. Not only does it protect you, but your clients may want to see proof of insurance before they hire you. Not having the right coverage can therefore result in losing out on customers. For instance, if you’re a general contractor, a homeowner may ask what sort of insurance you carry before you start work on their house. That’s because if you injure yourself, or the work you do results in damages, those costs may fall onto them. For contractors, it’s likely that your clients may ask if you and your company are protected by public liability insurance, property damage insurance and workers compensation insurance.
And again, while not mandatory, having business insurance is important because it protects your business from financial loss due to unforeseen events, such as accidents, lawsuits or natural disasters. Without adequate insurance, your business could face significant financial hardship, or even bankruptcy.
Anyone that is running their own business can benefit from business insurance. This includes entrepreneurs, small businesses, medium-sized businesses and large enterprises. If you own property, vehicles, tools, or equipment, or if your business provides professional services or advice, insurance is essential to protect against potential liabilities. Even if your business operates from home, you should consider insurance to cover risks that may not be included in your home insurance policy.
There are various coverage options available to business owners, and knowing the right option for you requires speaking to a business insurance professional — which RATESDOTCA can connect you with. In the meantime, familiarize yourself with the coverage types below.
| Coverage Type | Description |
|---|---|
| Commercial General Liability (CGL) | This covers bodily injury, property damage, and personal injury claims as a result of your business operations. This is one of the most common types of business insurance and is considered essential for businesses that interact with the public. |
| Employer's Liability | This protects you against claims made by employees who suffer work-related injuries or illnesses that are not covered by workers' compensation. This coverage can help with legal costs and compensation. |
| Product Liability | Product Liability Insurance safeguards against claims involving third-party property damage or bodily injury resulting from one of your business’ products. If something goes wrong, this coverage will protect you against issues like inadequate safety warnings on your products. |
| Cyber Liability | This is an extended business liability coverage, designed for protecting you in the event cyber criminals compromise your business or your customer data. Cybercrime is becoming more prevalent and businesses are increasingly becoming a target. Cyber attacks can take many forms, including ransomware attacks that hold your data hostage in exchange for money, or stealing your proprietary data to help competing companies. In the event that such attacks result in damages to your business, or you are held liable for stolen data, Cyber Liability Insurance can help you cover costs. |
| Professional Liability (Errors and Omissions) | This covers you if a client alleges that a service you provided resulted in a financial loss. It also protects you against lawsuits that allege either failure to provide services as promised, or that your company engaged in negligence or misconduct. |
| Commercial Property | Commercial Property Insurance covers the physical assets of your business, including buildings, equipment, inventory, and furniture, against risks such as fire, theft, and natural disasters. |
| Directors and Officers Insurance (D&O) | Directors and officers are senior members of your company that have legal obligations they must adhere to. In the event one of these employees are alleged to have breached these obligations, D&O insurance is designed to protect your business. |
| Event Liability | If you are an event planner or run another business where large amounts of people are attending, you will want to ensure you have the right coverage. Event Liability Insurance can protect you as you organize or host weddings, conferences, concerts or sporting events. |
| Commercial Auto | Commercial auto insurance coverage is for vehicles used for business purposes. This can include coverage for property damage, bodily injury, and liability, as well as damage to the vehicle itself. |
Investing in business insurance is a smart decision for any business owner in Canada. You can protect your business from a variety of risks with the right coverage and ensure that it remains financially secure, even when unexpected challenges occur. Whether you’re just starting out or have been in business for years, exploring your insurance options and securing the right coverage is essential for long-term success.
Business insurance is a very unique product, with policies being written for small companies with only one employee to those with thousands of employees.
How much revenue your company makes, the number of commercial vehicles you have, what sort of property you’re ensuring, and the type of industry your business is in all have an impact on rates.
For instance, a quote for a yoga business with revenue of $250,000 and three employees located in Vancouver will be quite different from what a general contractor business with 12 employees located in Toronto with revenue of $1.4 million might cost.
As we mentioned, other factors, such as your years of experience as a business and your insurance claims history, will all be used to calculate your premium.
The best way to know how much you’ll pay is to get a quote on RATESDOTCA today.
There are numerous factors that go into pricing insurance for your business. These include everything from the type of business you run, to how valuable the vehicles, property and tools your company owns are.
These factors can significantly impact the premium you’ll pay and understanding them can help you better manage your insurance costs. Below, we list and expand on some of the key factors that will impact your premium:
By understanding these factors, you can make informed decisions about your business insurance and take steps to potentially lower your premiums. Regularly reviewing your coverage and working with an experienced insurance provider can help ensure that you’re getting the best rates for your business needs.
Every industry faces unique risks, which is why different businesses require tailored insurance coverage to protect against specific challenges. Whether you’re a contractor on a job site, a consultant providing expert advice, or a retailer selling products, having the right type of business insurance is crucial. Below is a breakdown of various business insurance categories, each designed to meet the needs of specific industries and professions.
Each of these insurance categories addresses the specific needs and risks of different industries, ensuring that your business has the right coverage to operate confidently and securely. Whether you’re running a small fitness studio in Burnaby or a large manufacturing plant in Windsor, having the right business insurance is key to ensuring long-term success no matter what disruption you face.
There are different ways you can choose to help you save on business insurance cost. But cheap insurance does not always guarantee the best coverage for you. Always reach out to an insurance professional to discuss what could be the best coverage for your needs. Here are a few ways to consider to get cheapest business insurance quotes:
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Yes, insurance is one of the deductible expenses for businesses in Canada, according to the Canada Revenue Agency.
This includes all standard commercial insurance premiums for buildings, machinery, and equipment that are used by your business. Insurance such as cyber insurance, professional liability and commercial general liability can also be deductible.
When deducting insurance for your vehicles, you’ll be required to claim deductions as part of your motor vehicle expenses.
Meanwhile, insurance costs claimed as part of a workspace in your home are claimed under “business-use-of-home” expenses. Part of this process involves measuring out how much of your home you are using toward your business — i.e. if you are using a spare bedroom as an office, you must measure the square footage and submit it to the CRA.
Business insurance is not a magical solution to every problem your business has. What it covers will be clearly spelled out in your policy and you should make sure you fully understand what is covered when speaking to an agent or a broker.
Some risks that are often not covered as part of business insurance include criminal acts.
Business insurance is also not designed to cover cost guarantees or estimates. So, if you quote a client a specific cost for work, and are not able to fulfill that price, you will be responsible for negotiating the difference with your client or covering it out of pocket. employee injuries, losses from acts of war or terrorism or by natural disaster usually don't covered by business insurance unless business owner get additional coverage.
An insurance policy is designed to protect you from risks that can interrupt your business or result in costs that could threaten its financial viability.
To determine the amount of coverage you need, you should evaluate the risks to your business and which events may be financially devastating. A licenced insurance agent or broker can help you in determining these risks.
So, for instance, commercial property and commercial auto insurance are designed to protect you in the event a fire destroys your store front, or if one of your contractors is involved in a serious collision while driving a company vehicle.
Your type of business will determine the coverage you need as well. If you are a software company that works with many clients, you will likely want cyber insurance to protect against online risks to your business, or the threat that your customer data could be stolen.
Once you understand the risks you need to protect against, you can work with an insurance professional to get the right coverage. RATESDOTCA can help you connect with a licenced broker quickly.
Shivani is a former content manager at RATESDOTCA, whose focus was mortgages. She is an experienced communication and marketing professional who specializes in content strategy and SEO.
She holds a Digital Marketing Management certificate from the University of Toronto, a Business Communications certificate from the University of British Columbia, a Master’s degree in Mass Communication from Symbiosis Institute of Media and Communications and a Bachelor's degree in English from the University of Delhi.
Shivani has previously worked as a deputy digital productions editor with PMNA-The Canadian Press, and as an editor with The Globe and Mail, Toronto Star, and the Investor's Digest of Canada. She has also worked in reputed news media groups in India and the Middle East.
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