If you’re already a business owner or just starting out your small business in Ontario, you are probably on a search for all the things that will make your company thrive and succeed.
One of the things you need to be knowledgeable about is business insurance in Ontario to be able to find the best policy for your company.
What is Business Insurance?
Business insurance is a type of coverage that protects any enterprise’s financial assets and both actual and intellectual property of the business.
It protects businesses from losses that can occur during the work process as well as ones that are due to external or natural causes.
It’s a broad term that refers to a group of coverages that are purchased by businesses rather than individuals.
Types of Business Insurance in Ontario
As mentioned above, business insurance has many types of coverages that fall under it. Here are the most common types of business insurance you can get:
- Property Insurance
- Professional Liability Insurance
- Commercial General Liability Insurance
- Workers’ Compensation Insurance
- Product Liability Insurance
- Commercial Vehicle Insurance
- Business Interruption Insurance
- Cyber Liability Insurance
- Data Breach Insurance
- Errors and Omissions Insurance
- Employment Practices Liability Insurance
These are not all the types of coverages out there, there are many more and as you can see, they are a lot. That’s why it won’t make sense for each business to purchase all types of coverages, businesses should only purchase ones that are helpful to their specific company needs.
Cost of Business Insurance in Ontario
When it comes to the price of business insurance, the variation can be quite large, from $500 to $5000 per year. The price for small business insurance may be on the lower side but that would still depend on the amount and types of business insurance coverages you decide to include in yourpolicy.
There are many factors that determine the cost of business insurance in Ontario such as the nature of the business, whether you work with your hands (building or fixing), or provide a service. Other factors are location, years of experience, number of employees, how much your business is worth, risks involved in the business, type of products or service, and the size of the business.
Why Get Business Insurance in Ontario?
Many businesses, especially small ones, believe that there is no need to be spending money on insurance and don’t quite understand why it’s necessary. There are, in fact, quite a few reasons why you need business insurance:
- It’s A Requirement
If you don’t do enough research before starting your small business in Ontario, you won’t be aware that required by law to have business insurance in Ontario. Operating a business in an area without insurance is illegal, and that’s because the government knows the importance of insurance in the business world.
- It Protects Employees
One of the main coverages required in business insurance in Ontario is worker’s compensation coverage because it aims to protect the interest of employees. If you’re running a business, you want to have loyal, helpful employees, and to have that you need to ensure your employees’ rights when it comes to things like medical care, missed wages, and other benefits.
- It Protects Customers
A Business Owner’s Policy (BOP) is one that can protect your customers by including both property and business liability coverage into one. This means that if a customers get into any type of accident on your business property, it will be covered by insurance. This covers property damage, product liability, bodily injury, and personal injury.
- It Establishes Credibility
Insurance means safety and having it as a business shows both your employees and customers that you’re a safe choice to do business with. It gives the impression that if anything goes wrong, your business is protected and there is a way to be compensated.
Showing credibility as a business is important, especially for small businesses, and insurance is one of the best ways to do it.
- It Protects from Natural Disasters
Business Insurance in Ontario is most needed for the high probability of damage due to natural disasters.
Ontario witnesses all kinds of natural occurrences such as flooding, forest fires, tornados, lightning, and hurricanes.
That’s why it would be unwise not to have a safety net in case any damage from these natural disasters affects your business or products.
What Types of Insurance are Needed for a Small Business?
As you already found out by now, there are many business insurance options out there, and not all of them may suit your business. If you’re just starting out, there are basic business insurance coverages for small businesses to have.
The basic coverages are General Liability Insurance, Professional Liability Insurance, Business Income Coverage, Commercial Property Insurance, Workers’ Compensation Insurance, Commercial Umbrella Insurance, and Business Owner’s Policy (BOP).
What Does Business Liability Insurance Cover?
Business liability insurance includes different types of coverages that aim to offer legal costs in the case of any allegations against the business as well as protection from any damages resulting from a settlement or reward.
The coverages that fall under business liability insurance are:
- Commercial General Liability (CGL) Insurance: It covers costs from third-party claims alleging property damage or bodily injury.
- Professional Liability Insurance: Also known as Errors and Omissions and covers claims about negligence, failure to deliver service as agreed, and misconduct.
- Commercial Property Insurance: It provides financial coverage for property damage or loss that happens due to external, unforeseen events.
Who Needs Business Liability Insurance?
The Canada Business Statistics showed that Ontario has more than 420,000 businesses and 98% of them are small businesses.
While all businesses, big or small, need business liability insurance, small businesses are considered more susceptible to financial risk that could lead to bankruptcy when faced with any legal claim.
Tips To Get Cheap Small Business Insurance in Ontario
Many small business owners are always hesitant about getting insurance because of its cost, and while it could be expensive for a business just starting out, there are some ways you can get cheap small business insurance in Ontario.
A great hack to have cheaper insurance is to combine all policies under one which will qualify you for a discount with your insurance company.
Another way you can lower the cost of your insurance is to compare several insurance quotes from different providers to make sure you get the cheapest option.
Finally, the best way to lower insurance costs is to put in the effort to manage business risks and implement safety measures that lower chances of risks.