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Understanding the Insurance Products Available to Small Business Owners and Entrepreneurs

All businesses face risks; it’s an unfortunate and unavoidable truth.

But while larger businesses often weather the storm, taking losses in stride, small businesses are easily devasted as a result of insufficient insurance coverage.

One costly disruption is all it takes to ruin a small business.

Without sufficient insurance, this makes it nearly impossible for smaller businesses and entrepreneurs to recover.

Your business is your livelihood, after all. Whether disruption, damage, or injury, the unpredictable has lasting financial effects for any business.

There is good news, however. Thankfully, small business insurance can help protect your livelihood, as well as the investment you’ve made in it.

We’ve put together this helpful guide to help you navigate the commercial insurance products that will help you keep your business running, no matter what the world throws at you.

Why Your Business Needs Insurance

Would you be able to cover costs in the event of an emergency or disaster? What about legal fees from a lawsuit?

Furthermore, could you continue to operate in the event you, an employee, or customer are injured on your premises?

Small business owners, especially new business owners, often can’t cover these costs outright. Furthermore, the cost of startup can be particularly draining, and it can take time for a business to become profitable.

That’s where business insurance comes into play.

Small business insurance protects you, your business, and all your assets from various risks.

Your assets may include:

  • Vehicles
  • Inventory
  • Office space
  • Equipment
  • Employee skills (important to note employees are not a tangible asset, but their expertise and skills are intangible assets)
  • Partners

Key Insurance Coverage Your Business Needs

The insurance coverage your business needs depends on the nature of your business and your unique situation. There is no one-size-fits-all insurance coverage for small businesses.

Speaking with an insurance broker can help you find the best type of insurance for you and your business, and to ensure you’ve got the coverage you need.

That being said, these are some of the most common insurance products small businesses regularly use:

Business Insurance for Owners, Partners, & Employees

Injury, illness, and accidents can happen at any time.

These types of insurance protect small business owners, as well as their families, from these unexpected events that can result in the loss of key personnel.

  • Life insurance protects your family from incurring your business debts if you die or become injured and can no longer run your business.
  • Disability insurance gives you an income while you are unable to work due to illness or injury.
  • Critical illness insurance gives you a lump-sum benefit if you are diagnosed with a critical illness.
  • Key person insurance protects you against the loss of key employees who help you run your business.
  • Partnership insurance allows you to buy your partner’s shares in the business and keep running the business if your partner dies, sometimes referred to as buy-sell insurance.
  • Health insurance for owners and their employees covers health and dental expenses. This insurance is a great incentive for recruiting employees.

Business Insurance for Property & Earnings

Disasters and emergencies can cause major disruptions to business and devastating property loss.

To protect your business property and assets from an event that destroys some or all of your assets, consider the following types of insurance:

  • Property insurance is essential to protect your business property from damage and destruction from fires and other disasters.
  • Contents insurance covers any assets that you store at your business. If you lease a business space, your landlord’s property insurance protects the building, but you need contents insurance to protect your assets within.
  • Business interruption insurance covers your loss of earnings if you are forced to close your business during an emergency or disaster.
  • Vehicle insurance covers any vehicles your business owns.
  • Equipment breakdown insurance covers pressure, electrical, and mechanical equipment that is essential for your day-to-day business operations—i.e. cash registers, telecommunications equipment, hot water tanks, heating and cooling systems, copiers, and ovens.
  • Small business insurance for home-based businesses covers your business assets and property that your home insurance won’t cover.

What Is Liability Insurance and Why Is It Important?

Small business liability insurance protects your business from lawsuits.

This insurance can save you from hefty legal expenses in the event that you, your employees, your suppliers, or your equipment injures someone.

  • General liability insurance covers injuries to clients and employees on your business property.
  • Product liability insurance protects your business if your products are defective or cause serious harm to people using them.
  • Professional liability insurance protects your business if a client sues you for being negligent, or for making errors or omissions, while you provided a professional service.
  • Cyber liability insurance protects your business from lawsuits resulting from compromised personal or commercial data.

Whether you run your small business from home, leased space, or commercial property, contact a small business insurance provider in Ontario to find the best coverage for you.

Small business insurance is essential to protect you, your business, and your livelihood from the unexpected yet possible devastating events that would be difficult to recover from.

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