There are no universal risks that two small businesses would share. A bakery is concerned about fire and equipment failure. A consultant is concerned with a client criticising his or her counsel. A landscaping firm is concerned with vehicle accidents and injury on the job-site. That is why small business insurance in Ontario isn't one-size-fits-all — it's a group of coverage types that can be customized to fit your business.
Are you a little bit uncertain about what type of policy you should have or if you should have it at all? Here's some thoughts on coverage decisions according to your industry.
In any industry, there are some essential coverages that are common to most small business insurance policies in Ontario:
General liability insurance — protects against injury or property damage claims from third parties that are business-related.
Commercial property insurance — covers the building, equipment and inventory from fire, theft or damage.
Business interruption coverage — supplements lost income if the covered event necessitates temporary closure of the business.
The right coverage then gets much more specific to the industry.
Retail has a greater exposure of inventory, foot traffic, and property risk. When the storefront is busy, it provides a customer with more opportunities to fall and injure themselves, and physical inventory can be stolen, set on fire or damaged by water.
Retail owners should focus on:
Good property insurance, reflecting the real replacement value of stock.
General liability (with sufficient limits for customer injury claims).
Crime coverage against employee theft or break in which is typically neglected until the event happens.
If you are in a business of providing advice, expertise, or services instead of having a physical product to sell, the greatest danger is that your client is going to come back to you saying that you did something to them that resulted in a financial loss.
That's where professional liability insurance, also referred to as errors and omissions (E&O) coverage, comes in. These claims can turn into a big fight with the client, result in a bad recommendation, or a missed deadline, and the general liability insurance will likely not cover the claim. Many home based consultants don't realize that this exposure exists because they don't have a store-front or inventory to deal with.
The factors of job site injuries, the use of heavy equipment, and third party property damage expose contracting businesses to some of the highest risks of any small business. Here, the priorities for coverage focuses on:
General Liability with higher coverage limits that is generally necessary prior to starting work for clients or general contractors.
Theft of tools and equipment — it is not uncommon for tools or equipment to be stolen from job sites or vehicles
Commercial auto insurance for any vehicle transporting tools, materials or crew.
Once you are an employee, you are covered by WSIB workers' compensation insurance.
Food-service businesses carry multiple types of risk: property risk – because of the possibility of a fire in the kitchen or equipment failure, liability risk – due to the risk of injury to customers or food borne illness claims, and business interruption risk – if the business was interrupted by an incident covered by insurance or due to the failure of equipment.
The best policy for this industry combines property, general liability, equipment breakdown and business interruption coverage, as a few days without customers can seriously affect a restaurant on a thin profit margin.
Many small business owners think that having a homeowner's policy automatically means that it also covers their businesses. In most cases, it doesn't. A standard home insurance policy may not catch certain visits to the client, deliveries or business equipment used at home, etc. which could leave a gap in coverage that's only realized in the aftermath of a claim.
Even a modest small business insurance policy can fill that void by providing a little more in the way of equipment and liability coverage than simply a traditional policy would.
The coverage changes with the growth of a business. A small business with no employees, a car to run and a lot of money in its pockets is different from the same business two years later with a staff of people and a wide revenue base. Don't set coverage once and forget, as it's important to review your policy every year to make sure it stays current with your business rather than leaving new risks uncovered or paying for coverage that is no longer needed.
While it may be tempting to opt for the lowest quote available, the lowest premium can also be paired with a lower level of coverage, a higher deductible, exclusions, and more, and these will all be revealed when a claim is denied. Price alone is not the best way to compare but rather the full package of premiums, limits, deductibles and exclusions.
Since insurance coverage requirements are highly specific to each industry, PJ Insurance Broker has the time to get to know you and the business you operate before recommending a policy. PJ Insurance Broker isn't a small business template that fits every type of small business; he/she makes sure to tailor coverage to your industry, business size, and risk profile, making sure it applies to any retail, consulting, contracting, food service, or home business.
This industry-specific approach can help business owners in Ontario save on covering risks that they don't have or uncover risks they don't have until after they've already occurred.
Selecting the right small business insurance in Ontario begins by first being aware of your particular risks, and not getting the one-size-fits-all policy. When you don't know what the true exposure of your industry is under your current coverage, it's better to know before you have a claim to ask the question!
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Call today for a custom-made small business insurance quote specific to your industry.