Everyone needs insurance, whether it’s an individual going about their daily affairs or a company trying to make a profit. Insurance helps to protect against future uncertainties, and for companies, it enables them to manage business risk. But getting insurance can be tricky. So, how do you get corporate insurance in Canada?
Getting corporate insurance can be a nerve-racking experience because you need to ensure you get the best deal. There’s a risk of either over or under-insuring regarding corporate insurance. Either has disadvantages which are best avoided.
This article defines corporate insurance, highlights its examples, and discusses what you need to do to get the right corporate insurance.
Corporate insurance is insurance used by companies and other commercial organizations to protect their business against any operational risks. Such risks range from theft and accidents to losses due to fraud and fire. Corporate insurance is generally comprehensive and usually benefits the company and its employees or even past employees.
Steps for Getting Corporate Insurance
The challenge of getting an ideal insurance policy is that no one can perfectly predict the future. It’s this inability to predict risks that provides profit for insurance companies. But insurance isn’t a gamble. Here are the steps to getting an ideal commercial insurance policy.
Determine and list all your business risks
The first step to getting any corporate insurance is to inventory your business’s potential liabilities and losses. This must be comprehensive, which means it will cover all properties, buildings, equipment, vehicles, death of key employees, cybersecurity breaches, disruptions in the supply chain, etc. The list should include every possible thing that could disrupt your business and lead to losses.
Separate Commercial liabilities from personal liabilities
One of the challenges small business owners faces is distinguishing between what they use for commercial or personal purposes. It’s essential to separate the two to avoid under or over-insuring. For example, your personal auto insurance policy might not cover damages incurred when using the car for commercial activity. Also, you don’t want to make the mistake of insuring a personal risk with commercial insurance. This will only increase the cost of insurance with no actual benefit to your business.
Explore strategies for reducing your premium
Premiums are the insurance cost, and you want to make sure your premium isn’t too expensive. Lower premiums are always great but only when you still have the comprehensive insurance policy that you need. Don’t exclude a policy you need to reduce cost. Instead, adopt cost-cutting strategies such as asking your insurance provider for discounts, minimizing your risks, correctly categorizing your employees, buying multiple policies from the same provider, etc. While you should never underestimate a serious risk, you should also resist the urge to overestimate.
Use a broker or insurance company that is an industry expert
Every industry has insurance brokers who assess risks and offer adequate protection. For instance, the risks of operating a restaurant aren’t the same as that of a pharmaceutical company. Thus, it would be best if you looked for an insurance broker with market expertise in that industry to help you select the right policy. This is even a cost-cutting policy. You can also go to insurance companies directly and save yourself the additional cost of consulting a broker.
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Types of Corporate Insurance
There are several kinds of corporate insurance in Canada, and here are some of the most important for any business in Canada:
Commercial Property Insurance
Every business has property, whether tangible or intangible. Protecting these properties from theft, damage, or destruction is essential. There are risks of fire, flood, theft, vandalism, or even natural disasters for physical properties such as buildings and equipment. Intangible properties such as intellectual property can also be stolen or infringed, so insuring them isn’t a bad idea.
Given how valuable properties are, you should never under-insure them. When it comes to property insurance, anything that your business cannot function without should be insured.
General and Professional Liability Insurance
This covers legal issues that businesses might run into over their operations. Whether it’s an accident due to a product or injuries within the workplace, you should have sufficient insurance to limit the risk. Your general liability insurance can cover damages, the cost of legal proceedings, and other ancillary costs.
On the other hand, professional liability insurance is for the negative consequences of professional advice or service you give. Suppose you’re a financial planner and provide professional advice that resulted in losses. In that case, the insurance will cover the cost of the lawsuit and any damages you have to pay if held responsible. Thus, professional liability insurance is for businesses that offer professional services or advice.
Commercial Auto Insurance
If your company owns vehicles necessary for its operations, it’s important to get commercial auto insurance. You can insure the whole fleet where you have several cars. This is cheaper than getting individual auto insurance for each vehicle. How many vehicles amount to fleet differs in each Canadian province.
Cyberattacks and ransomware attacks have become very common in an interconnected world where most businesses rely on computers, data, and the internet to operate seamlessly. Most attacks target small businesses that may not have the funds to recover quickly. You can protect yourself from the risks by getting cybersecurity insurance. Note what the insurance covers and what will trigger the coverage.
You can also get insurance to cover any losses from an employee’s fraudulent or criminal act against your business. Crime insurance can save you the heartbreak and financial loss of learning that an employee is shortchanging you. Crime insurance can cover several actions.
Corporate Personal Insurance
You can also get insurance to protect yourself against the act of key officers in your company or from the loss of a key person in your organization. For example, if your Directors breach their basic duties, which exposes the board to claims, you can get insurance to cover these key officers. Also, where there is a key employee or officer whose illness or death could hurt your company’s finance, you can get insurance to cover the risk when that happens.
Corporate insurance is essential for every business. But it’s important to know how to get the right policy and, more importantly, the types of insurance you’ll likely need. You can speak with an expert brokerage firm to get specialized advice.