Small Business BC

Small Business Insurance: What You Need to Protect Your Business

If you're a new entrepreneur, you may be surprised – even overwhelmed – to learn how many types of insurance coverage are available to protect your budding business.

Being savvy about insurance can save you money and ensure you get the protection your business needs. To help improve your insurance acumen, here's a primer on common types of business coverages.

Types of Insurance

Liability Insurance

Liability insurance is what protects you if a client slips on your icy walkway. You could be held liable for any bodily injury or property damage resulting from a business interaction whether your business is home-based or not.

Building Coverage

If you run your business from a rented space, you might need building coverage in the event that an insured loss, such as a fire, causes damage to the building in which you rent. 

Stock or Equipment Coverage

This coverage will help replace or repair damaged business property and contents if an insured loss, such as a water leak from a ruptured plumbing pipe, should occur.

Business Interruption Insurance

When your business is shut down because of an insured loss, this coverage will help compensate you for the loss of income.  For example, if your garage business shuts down due to a fire, you would be compensated for the income you would have expected from repairing cars during that period.

Extra Expense Insurance

After an insured peril or loss, you may need to rent equipment or lease temporary space to get your business back on track. These expenses are covered by this type of insurance.

Errors and Omissions (E&O)

If you're a consultant or provide professional advice or services to clients, this coverage is for you. If you give a client professional advice that is inaccurate or incomplete and the client's business suffers as a result, errors and omissions insurance will cover the damages and legal defense.

Malpractice Insurance

Most people have heard of malpractice insurance for doctors, but it can cover many types of services.  For example, a hairdresser or dog groomer may consider malpractice insurance in case a treatment causes injury.

Additional Considerations

You will need an auto insurance policy for any vehicles used by your business. You might also consider crime coverage, which protects smaller businesses against losses from burglary, robbery and theft, or  a fidelity bond, which protects larger businesses from employee theft.  Finally, some businesses, such as manufacturers, importers, exporters or professional consultants, may require specialized coverage.

An Insurance Professional Can Help

Insurance can be confusing, so it’s important to find an insurance representative that you trust. Ideally, it should be someone with experience in dealing with small businesses and who is familiar with the nature and risks of your particular enterprise.

Your insurance representative will be the best source of advice on how to protect all aspects of your business. The more your representative knows about your organization, the better prepared he or she will be to advise you about the type of insurance you need.

For more information about business insurance and helpful resources visit Insurance Bureau of Canada’s website.

About The Author

Bill Adams

Bill oversees Insurance Bureau of Canada’s work in the Western provinces. IBC is the national industry association for Canada’s private home, car and business insurers. For helpful insurance information, visit www.ibc.ca.

Articles and blog posts written by Bill Adams

Bill Adams

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