How Business Insurance Works In Canada
Commercial insurance works similar to other insurance products. It is a contract between your business and your insurer. You pay a premium in exchange for the insurer covering you against threats. When you file a claim, you get compensation for losses based on your plan limits.
You will pay the deductible amount listed in your plan. Policies typically are effective for one year and you can renew annually. You can adjust your coverage at any time.
Is Business Insurance Required By Law?
The short answer is no, in most cases. Most businesses can operate without insurance in Canada, but it doesn’t mean that you should. If you do, you’ll leave yourself open to financial vulnerability.
Some businesses require more protection than others. Make sure you know what the mandatory insurance requirements are in your industry and location. At a minimum, you should have liability insurance to protect against legal action. However, it is recommended to take out additional protection to have peace of mind in knowing you are covered should you experience a loss.
Common Types Commercial Insurance
There are many types of commercial insurance policies that are designed business type, industry, and risk exposure. Every organization has unique challenges. Get an assessment to understand the types of coverage that will help protect your operations.
An advisor can help you assess your coverage requirements. With knowledge of your vulnerabilities, you can then choose the best solution for your specific situation.
Here are some the most common types of commercial policies you can get :
What Factors Affect The Cost Of Business Insurance?
How much you will pay for business insurance in Canada is based on a variety of factors. The larger your company, the greater exposure you will have to larger financial losses. Here are the main factors that will affect your premiums :
- Your business size : Bigger companies pay more for insurance. For example, a national grocery chain with locations across Canada would pay more than a local grocer with one location in Toronto. The more assets you must protect, the more it will cost to insure them.
- Your industry : Some industries are inherently more dangerous than others. Claims are more common, and the dollar value is greater. Industries where the chances of injury or financial loss is great will also bump up your premiums.
- Type of policies : There are many types of policies available. The more you have, the most it will cost. Many companies start out with basic plans and add more overtime as they grow.
- Insurance limits : The limits you set for your plan will affect your payments. The higher the limits, the more you will pay.
- Deductible : Like your limits, what you set it at will impact your premiums. Increasing your deductible will help you save. Whatever amount you choose, remember, this is what you will pay out of pocket if you file a claim.
- Company annual revenue : The more money you bring in, the more it will be to insure you. There is more to protect.
- Location : Where you operate has a direct impact on potential threats to you. The weather, crime rate, population, and other location-based factors influence you plan needs.
- Number of employees : The more people you have, the more you need to protect. It also increases your exposure to liability.
- Your insurance history : Past insurance claims are an indicator of future action. If you’ve had multiple in the past, you are more likely to file a claim in the future.
How Much Does Commercial Insurance Cost In Canada?
Commercial insurance rates are different for every business. Each company has a unique combination of insurance needs. Costs are dependent upon the answers to these questions:
- What do you do? What products and services do you offer?
- What industry do you operate in?
- How much are you worth?
- How big is your company? How many employees do you have?
- Where are you located? Do you have more than one location?
- What are things could impact your business the most?
- What type of protection do you require?
To get an accurate estimate, shop around for quotes. We’re happy to help you with this process.