The Guide to Small Business Insurance in Canada


Jan 31, 2020

So you've decided to finally start your small business dreams in Canada this year; that's great to hear! We know you already have a lot of steps to start a business so it may be tempting to skip getting small business insurance. But in a world of freak accidents that can happen to any business of any industry and any size, small business insurance is crucial in Canada. Specifically, small businesses have the hardest time bouncing back from a claim without insurance. This early on, the last thing you need to drain your finances or your reputation is a lawsuit or injury. In this guide, we break down the different coverages you should definitely consider for your small business insurance in Canada.

Commercial General Liability Insurance (CGL)

Commercial General Liability insurance, or CGL, provides protection against:

-Bodily Injury and Property Damage

-Personal and Advertising Injury

-Medical Payments

-Tenants Legal Liability

-And in some cases, can include Employers Liability and Non-Owned Automobile Liability coverages.

All companies including home-based businesses should be carrying a CGL policy as it covers defense and damages against a lawsuit if your products or services cause or are alleged to have caused bodily injury or property damage to others. You can't predict or protect yourself from a lawsuit arising. Litigation may be someone's only option to eliminate their liability or cover their medical expenses. It also allows for peace of mind and credibility.

Property Insurance

Commercial Property insurance coverages protect a company's physical assets against loss or damage from a broad range of causes. If you own, lease or rent any building, unit, inventory, equipment, furniture or installed fixtures, you may want to consider protecting your investment or your contractual obligations. Property of others that is in the care, custody and control of your business would also be covered which further protects your company.

Errors and Omissions (E&O)

Errors and Omissions Insurance (E&O) or Professional Liability protects your company against claims arising from failure to provide the expected service level. For example, if you made a mistake and miscalculated a total or accidentally sent the wrong client private information. It can also cover claims arising from financial loss from wrongful acts that would not be covered under CGL insurance. Business, IT and Medical professionals -insurance brokers, freight forwarders, architects, engineers, lawyers, health care practitioners, developers, management consultants and other professional service providers - can benefit from this kind of coverage.

Directors and Officers (D&O)

Directors and Officers Liability insurance, D&O, provides coverage for a business and its corporate directors and officers (and their spouses) from lawsuits. These lawsuits can be brought by customers, donors, shareholders, competitors, suppliers or other parties for the actual or alleged wrongful acts that arise out of managing a business. This coverage includes legal fees with the settlements, among other defense costs. D&O insurance is vital for any business looking to attract the best officers and directors as they regularly expect a standard "hold harmless" agreement. Defense costs alone can be overwhelming for an organization at any revenue level.

Cyber Insurance

Cyber insurance provides coverage for cyber-related incidents like phishing or malware attacks. It also covers response costs, system interruptions and privacy liability.

Business Interruption Insurance

Business Interruption or Business Income insurance is not a stand-alone coverage but rather, is an extension of business property insurance that can cover profits, fixed costs including ordinary payroll and extra expenses when a business property claim arises to cover the profits a company would have earned had the loss not occurred. This can be extremely important coverage for businesses of any size, as extra expenses can interrupt the ability for a business to continue servicing its customers and meet contractual obligations. Without this coverage extension, your business may have to permanently close if a claim arises.

You may find that not all of these coverages apply to you; every business is different! There's no one size fits all solution for small business insurance in Canada. These are just common and recommended insurance coverages to consider. That's why, it's recommended you speak to a broker who can look at your situation and access your needs. At Foxquilt, our insurance expert brokers can look over your individual needs and guide you through what you need to stay protected. You can even join up with other small business owners and entrepreneurs in Canada for group business insurance savings! Get your quote today

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