The Top 10 Reasons Your Business Needs Commercial Insurance Coverage
One of the primary responsibilities of being a business owner in Canada is building a solid reputation that customers trust. After all, word-of-mouth is very powerful, and with online reviews, customers and employees do not hesitate to express individual experiences when it comes to dealing with your business.
So, consider these scenarios. What happens if one of your employees or customers got injured on your business property? What would happen if the building your business is located in suffers from a fire or flood. This is where commercial insurance coverage steps in and protects your business.
This article will define what commercial insurance coverage is, what types of businesses should have it, and the top ten reasons your business needs it.
What is commercial insurance coverage in Canada?
Commercial insurance coverage in Canada is a specific type of business insurance meant to manage any business risks. Business risks include injuries, burglaries, and natural disasters that could occur in your business.
For example, one day, a customer comes to your business to visit you. They accidentally slip and fall in the reception and injure themselves with a twisted ankle. When the customer files an injury claim against your business, your commercial insurance coverage gets activated, covers the legal costs, and pays out the customer’s damages if it is found liable.
What types of businesses need commercial insurance coverage in Canada?
In case an injury claim or damages occur to your business, as a business owner, you’re obliged to protect your business assets to make sure that you do not suffer financial loss.
Here are the types of businesses that should acquire commercial insurance coverage:
- Building owners
- Cargo (Imports/Exports)
- Condominium corporations
- Childcare and daycare providers
- Dance studio owners
- Food Trucks, Carts & Trailers
- Gym owners
- Home-based contractors
- HVAC Contractors
- Medical professionals
- Hair salon and spa owners
- Sports arena owners
If your business is not on the list, check with a commercial insurance broker to see if you need commercial insurance coverage.
Ten Reasons Your Business Needs Commercial Insurance Coverage
1. Protection against natural disasters
You cannot control mother nature, but commercial insurance steps right in when mother nature erupts in various natural disasters such as lightning, hurricanes, tornados, and high winds.
Having commercial insurance coverage protects the possessions inside your business property if a natural disaster should strike.
2. Bodily injury caused to third parties
If a customer or client slips or falls while visiting your business property, they could sue you for their injuries. Commercial insurance takes care of their injury claim, helps cover their medical expenses, and pays out their settlement.
3. Protection for your employees
Employees are the most valuable asset to your business, and commercial insurance is there to protect them if one of them gets into an accident and injures themselves while on the job. Like customers filing an injury claim against your business, it’s a good idea to protect your relationship with your employees if they file a liability claim on your business.
4. Water damage prevention
Water damage can happen in several ways. For instance, an employee might forget to turn off a tap, and it overflows in the washroom. During the winter holiday, a pipe might burst if the heat is left off and floods the office. Or an employee forgets to close a window, and a thunderstorm damages office furniture and computers. With commercial insurance coverage, repairs and damaged items will be replaced by your policy.
5. Cover the cost of legal representation
In cases where customers or employees file an injury claim on your business, you might have to seek legal support with defence law representation. When your business has commercial insurance coverage, the cost to hire defence representation is covered.
6. Participation in public events
If your business plans to attend any events such as job fairs, tradeshows, conventions, or company galas, the venue you plan to set up a booth will ask you to provide proof of commercial insurance coverage. It’s essential to keep in mind that the kind of coverage required will depend on the type of event you plan to host. For instance, if you plan to serve alcohol at a company gala, the venue will ask you to add alcohol exposure coverage to your commercial insurance policy.
7. Property protection for fires
Fires spread fast and can cause enormous damage to your business. Without commercial insurance, it can take months for your business to get rebuilt. If you’re leasing a brick and mortar location, your landlord’s insurance only covers the damage caused to the building. However, your damaged property won’t be covered under your landlord’s insurance. That’s why you need commercial insurance coverage to protect your property in case of a fire.
8. Contracts may request proof of insurance
Businesses often deal with contracts such as banks, landlords, clients, and finance companies; they will request proof of commercial insurance many times before signing the agreement. Without insurance, you limit yourself with business dealings, and banks and landlords may reject your application.
9. Protect expensive equipment
Businesses like plumbers, electricians, medical professionals, farmers, and landscapers rely on their tools to do work. In case your equipment breaks down, or tools get damaged and need to be repaired, adding equipment breakdown insurance to your commercial insurance coverage covers the replacement or repairs of the damaged equipment and tools.
10. Customers ask you for proof of insurance
Prospective customers and clients can request proof of insurance before doing business with you. Any apprehension they have is eliminated when you show that you have commercial insurance because it adds credibility to your business. Proof of insurance acts as a security blanket for clients as they are assured anything goes wrong, your insurance can compensate them.