The best place to start in building your own business is by taking care of the risks that come with being self-employed and having your own small business. One of the best ways to do this, no matter where you are in the world, is by purchasing insurance for small businesses like yours. Insurance can protect you against things like damaged or stolen property, lawsuits, business interruption and more; but knowing what type of insurance will work best for you can be confusing at first.
Table of Contents
Overview
There are lots of different kinds of insurance for small businesses, but one thing that all owners share is a desire to protect themselves from risk. This overview will help you learn about insurance options for your company and give you some things to think about as you get started. If you find yourself wondering how an unplanned or unpredictable event could change your life, it’s time to ask if insurance might be right for your business.
2. What is different about a small business?
There are several things that differentiate small businesses from their larger counterparts. The most obvious is business size, but there are a number of other elements at play. Small businesses have different needs and face different problems than big businesses do, which means they need special insurance policies tailored to them. Business owners should be aware of these issues before they start shopping around for business insurance; otherwise, they risk being ill-informed buyers and paying higher premiums.
3. Basic liability insurance
It’s not glamorous, but basic liability insurance is one of those must-have small business insurances you should never skip. If you’re in business—regardless of whether or not you hire employees—you need a certain amount of liability coverage as well as certain coverages (such as property damage and workers compensation) mandated by law. If you don’t have any insurance at all, your liability will be limited to whatever assets you have on hand.
4. Property & equipment coverage
If you own a business or plan on owning one, then you’ll likely need property and equipment coverage. Property insurance protects against loss or damage to your building or any other physical structure. Equipment coverage protects your business’ computers, electronics, office equipment and vehicles. If your business sells tangible products (like candy bars or toys), then you’ll want a product liability policy. This type of insurance protects against claims of faulty design or manufacturing of a product that causes injury or death.
5. Employee benefits and other commercial coverage options
It’s important that all employees—and their dependents—are covered by a basic level of insurance, including health and dental. If any of your employees are self-employed, it’s also important they have appropriate business liability insurance. Another potentially useful employee benefit is disability insurance, which can help provide income replacement if an injury or sickness prevents an employee from being able to work.
6. Additional resources on commercial insurance
The Association of Canadian Insurers is a good place to start. The ACCI has a searchable database that offers detailed information on providers, and it’s easy to find providers by location. To get started, plug in your province or territory and type of business you operate under (i.e., bar/pub), and you’ll be presented with companies in your area.
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