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Header Are you a business owner Heres why you may need small business insurance
• Oct. 24, 2023

Whether you are a contractor, own a fashion boutique, or run your own hair salon, as a business owner, it's no secret that there's a lot that goes into operating a business.

While having a great business plan, securing financing, and developing a marketing strategy are all crucial to building a successful small business, financially protecting the company you've built from unexpected events is also important.

“Small businesses represent a significant portion of businesses in Canada today, but unfortunately they are also exposed to a variety of risks for which they need the right insurance protection,” said Tony Menon, Senior Vice President, General Insurance, TD Insurance.

Having the right business insurance coverage can provide you and your business with protection for insured events, such as customer injuries, break-ins and theft, or being involved in a car accident while making a company delivery.

Still not sure if small business insurance coverage is right for you? Here are three reasons why small business owners should consider business insurance.

If you have a home-based business, your standard home insurance policy may not cover you

While your homeowner policy may cover certain activities for your business, coverage limits tend to be much lower compared to the coverage you would receive through a small business insurance policy.

There are, however, certain types of coverage your home insurance may not cover.

For instance, if your home-based business was shut down due to an insured event such as a fire or theft, any loss of business income during this shut-down period would likely not be covered by your home insurance policy. This type of event would only be covered by business income/business interruption coverage (see below for a breakdown of the different types of commercial policies that exist).

Not all commercial insurance policies are the same … and you may need more than one

Commercial—or business—insurance policies can be as unique as your business, which is why it is important to consider factors such as your industry, location, and scope of operation when choosing a policy. These factors can help you understand the level of protection your business may need and why, as a business owner, you may find you need more than one type of policy.

For example, the owner of a bakery may need to consider commercial auto coverage for vehicles used to make customer deliveries in addition to commercial property coverage for their premises and commercial general liability insurance for third party injury claims, while a photographer may also need miscellaneous property coverage for the photography equipment that travels with them.

While commercial insurance policies may differ, here is a look at common business insurance policies you may want to consider:

  • Commercial Property: Essential coverage for physical loss or damage to your insured property, its contents and equipment, from covered events, such as fire or theft.
  • Business Income / Business Interruption: Coverage for loss of income and expenses incurred due to an interruption to your small business from an insured event.
  • Commercial General Liability: Coverage that protects you and your small business from financial losses caused by third-party claims involving bodily injuries, property damage, as well as personal and advertising injury resulting from your products, services, or operations.
  • Commercial Auto: Coverage for your commercial vehicles, like cars or vans, that are registered to your small business.

As your business may require more than one type of policy, by working directly with your insurance provider, policies can often be customized to meet your needs.

As your business evolves, your insurance needs will too

As your business evolves and operations (hopefully!) expand, it will be critical to ensure that any business insurance policies you have are reflective of those changes as well.

For instance, you may have outgrown your space and need a change in location. You may need to purchase an additional vehicle, hire more employees, or your revenue may change. If any of these changes occur, you should update your insurance provider to help your small business remain properly protected from insured events.

By planning and taking the steps needed to protect you and your business, you can focus on what you do best—making your business succeed and thrive.

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