Back to Blog
A group of business professionals in a meeting.

Common Questions and Information to Help You Understand Business Insurance in Ontario

A major financial loss can ruin a business. Theft, fire, lawsuits, injury, and many other factors cause a large financial strain and on businesses which they often have trouble recovering from.

Business insurance is available to protect your business from suffering such devastating losses and give you peace of mind. Depending on the type of business you own, there are various business insurance plans available that you need to consider.

To see what types of Ottawa business insurance are available, shop for business insurance quotes online.

Read on for answers to the common questions business owners have about business insurance.

Is It Really Mandatory to Have Business Insurance in Ontario and Why Do I Need It?

Businesses in Ontario are legally required to have worker’s compensation insurance from the Workplace Safety and Insurance Board (WSIB).

If you fall under any of the following categories, you must carry WSIB insurance coverage for your employees:

  • Independent operators;
  • Sole proprietors;
  • Partners; and,
  • Executive officers of construction businesses.

From the moment you hire your first employee, you must add worker’s compensation insurance to your business’s insurance policy.

WSIB insurance covers costs if an employee gets injured or dies as a result of their work at your business. This insurance will cover their medical treatment and disability and death benefits.

Even if the work seems low-risk, such as sitting at a desk all day, this insurance is still mandatory. It is there to protect you from future claims like slip-and-fall injuries and medical conditions like carpal tunnel syndrome which could ultimately cost you your business.

What Type of Insurance Do I Need for My Business?

Along with the mandatory worker’s compensation insurance, there are many types of business insurance available. Your Ottawa business insurance company can help you decide which types of coverage you need depending on your business type.

General Liability Insurance

This insurance protects from liabilities caused by negligence inside and outside of the business facilities and involving both employees and the public.

Professional Liability Insurance/Errors and Omissions (E & O) Insurance

This insurance protects businesses from lawsuits if a mistake or failure to perform within your business causes harm and leads to a negligence claim.

While this insurance is recommended for all types of businesses, it is absolutely essential to protect against lawsuits for professional work provided from the following professions:

  • Doctors;
  • Lawyers;
  • Consultants;
  • Realtors; and,
  • Architects.
Cyber Liability Insurance

This insurance will protect your business from liability if there is an electronic security breach compromising personal and commercial information.

This insurance can include theft of devices that contain organizational, client, employee, and other sensitive data.

Property Insurance & Contents Insurance

Whether you own or lease your business space, you need insurance to protect your property from loss and damages. This will protect your inventory, equipment, furniture, and signage from theft, fire, and storms.

If you lease your space, you may only need contents insurance to protect the assets that you store at your business.

Generally, property insurance does not protect against natural disasters, such as earthquakes and flooding. But if your business is in an area prone to these disasters, ask your insurance provider if there is additional coverage available for flooding and earthquakes.

Home Business Insurance

If you run your business out of your home, you may need additional contents insurance to cover your business assets. Your home insurance likely won’t cover your business equipment and inventory, so ask your insurer for additional insurance.

Product Liability Insurance

This insurance covers businesses in manufacturing and consumer goods industries. Product liability insurance protects from lawsuits related to a product developed by the business.

Company Vehicle Insurance

If your business uses company vehicles for business operations, you must insure these vehicles to protect against liability in the event of an accident.

At the very minimum, you should insure your company vehicles against third-party injury. But comprehensive insurance will also cover the vehicle.

If your employees use their own vehicles for business deliveries, they must notify their insurance companies so they can be covered for both business and personal vehicle use.

Business Interruption Insurance

This insurance compensates businesses for loss of income during events that cause interruptions to business operations. These include disasters and catastrophic events that prevent income due to the inability for staff to work at the business.

Life Insurance

If something were to happen to you (injury or death) and you could no longer run your business, life insurance would protect your family.

This insurance is especially important for a sole proprietorship since the business owner is personally responsible for the business debts.

Disability Insurance

If you injure yourself or become ill, disability insurance will pay you an income for a specified period of time while you are unable to work.

Partnership Insurance/Buy-Sell Insurance

This insurance allows you to purchase your business partner’s shares and continue running the business in the event that your partner passes away.

Key Person Insurance

This insurance protects you against the loss of key people who help you run your business.

Critical Illness Insurance

This insurance will give you a lump sum payment if you are diagnosed with a critical illness.

What Does Business Insurance Cover?

Business insurance will cover property, assets, and liability. Here is a general summary of the types of business insurance coverage.

Property Coverage

Property coverage applies to the building your business owns and its contents, including inventory, equipment, materials, and tangible and intangible valuables.

Liability Coverage

Business insurance also includes liability coverage. This coverage protects business owners and employees from various types of lawsuits that could be filed against them. Liability insurance pays for legal costs and damages if your business is found liable for a person’s injuries and/or damage to their property.

Business insurance protects your business from significant financial losses that could threaten your current and future business operations. Insurance makes it possible for your business to recover from losses so you can keep thriving.

Take the extra precaution to avoid major financial losses due to lawsuits and catastrophic events and speak with your Ottawa business insurance company to find the best coverage for your specific business type and needs.

With the right business insurance coverage, you can have peace of mind knowing your business is secure and protected.

Share this: