Your Guide to Small Business Commercial Insurance in Canada

Small business owners have a mountain of worries and responsibilities to think about. One of those worries and responsibilities is commercial insurance. You might wonder if you need it or not. The truth is, commercial insurance isn’t optional. If you’ve been in business for more than a year, you’re legally obligated to protect your company against losses. In most provinces, you can’t register your business without getting a certificate of insurance. 

Most small businesses have the same commercial insurance needs. However, even the smallest companies can have the most significant needs, and the largest companies can have the slightest needs. For example, a carpenter works with essential tools for his business and would be devastating to replace. At the same time, an accountant might use software that’s easy to replace.

Today, let’s go over what you need to know about small business commercial insurance in Canada.

Here’s what you need to know:

How to Choose the Right Amount of Coverage?

Commercial insurance protects your business against losses. Every business is different, which means that every business needs different amounts of coverage. There’s no magic formula for finding out how much insurance you need.

However, you can do a few things to get a ballpark idea of how much coverage you’ll need. First, buy the right amount of coverage for each policy. That’s pretty straightforward. Second, check the amount of coverage you already have. Do you already have a separate property policy or a homeowners policy? If so, you already have good coverage for property damage.

Third, figure out what you need to rebuild your business. How much capital would you need if a disaster destroyed your business to get it up and run again?

How to Choose the Right Kind of Coverage?

Not all business insurance policies are created equal. There are significant differences between property, liability and other commercial policies. Property insurance covers physical property damage. That includes your buildings, your equipment, and your inventory.

Liability insurance covers your legal responsibility to others. That includes actual and potential legal claims. Liability insurance also covers your legal responsibility to your employees.

Business income insurance covers lost income. It covers the revenue your business would lose while you rebuild it. It also covers the money you would lose while dealing with the legal claims.

Business interruption insurance covers the loss of future income. It covers the difference between the revenue you earned before the disaster and the revenue you made after the disaster. Other commercial insurance policies include crime, business legal protection, and more.

Common Mistakes to Avoid

Many small businesses overlook commercial insurance. Sometimes they don’t understand the importance of commercial insurance. Sometimes they forget to renew their policies. Sometimes they think their current policies are enough. That’s why there are a lot of small businesses that are up and running without commercial insurance.

That isn’t a good idea. A lot can happen to a business without commercial insurance. If a fire damaged your office and hurt your clients, your company might have to pay for the damages. If an employee accidentally hurt a customer, your company might have to pay a significant settlement.

The Bottom Line

Commercial insurance protects your business from costs that could be crippling. It also helps you avoid fines and penalties. The importance of commercial insurance isn’t something you can ignore. This is why it’s important to ensure your business is protected. Talk to a professional today and start figuring out your options.

If you are looking for commercial insurance brokers, we can help you. Kirkham Insurance is one of the leading insurance companies in Lethbridge, Canada, offering a wide range of insurance, including car, home, auto, commercial, and life insurance. We can also help you with the comparison of auto insurance. Contact us today to learn more and get started!