How to Buy Business Insurance

No matter how well you plan, running a business comes with elements of risk and unpredictability. Commercial insurance protects your business from accidents or property damage that may pose a significant threat to your operations.

Work with your insurance representative to find a policy that best meets your needs and protects your business. Your insurance representative can help you determine applicable coverages, premiums, deductibles and available discounts.

When you’re buying business or commercial insurance, insure for the specific risks your business faces. Typically most business insure their:

• Property. Where your business operates – in rented premises or from your home – makes a difference to the risks it faces. Commercial property coverage responds to physical loss or damage to buildings from a broad range of causes.

• Liability. Your business could be held liable for any bodily injury or property damage resulting from a business interaction. Liability insurance may also provide coverage for legal defence costs.

  • If you are a consultant or offer professional advice or services to clients, your insurance representative will likely suggest you have professional liability – also known as errors and omissions (E&O) – coverage.

• Stock and Business equipment. Part of your property insurance includes stock or equipment coverage to help replace or repair damaged property and contents. Specific coverage for machinery breakdown coverage may be required for specialized equipment.

• Extra expenses. This coverage can help with expenses necessary to keep your business operating immediately following an insured peril or loss.

• Business interruption. This coverage can compensate for loss of income while your business is shut down following an insured loss.

• Automobiles and fleets. Any vehicles used by your business will require coverage provided by an automobile or fleet insurance policy.

• Crime. Protection against employee dishonesty and theft. A fidelity bond protects financial institutions from employee theft.

• Speciality risks. Manufacturers, importers, exporters and professional consultants are just some examples of types of businesses that may require specialized coverage.

• Cyber security. Any business that accepts payment by electronic mean or maintains employee records has cyber and data risk. Speak to your insurance representative

What isn’t covered

While some policies provide more coverage than others, no policy covers everything that could go wrong. Insurance is intended to protect your business from loss or damage from unforeseeable events. Be aware that:

• Wear and tear can’t be insured.

• Losses or damage caused by acts of terrorism are not covered by your insurer. Specialty coverage for terrorism and political risk is available.

• Pollution coverage may not be available depending on your business.

Speak with your insurance representative to ensure that all possible avenues for coverage are explored. Make your decisions based on what coverage you need, your own tolerance to risk and how much you are willing to pay in either premiums or in losses that you cover yourself.

Keep your insurance up to date

As organization evolves, your need for certain coverage may increase or change. Be sure to review your policies with your insurance representative on a regular basis. Ask questions and make it your policy to understand your business insurance.