Written by: Josh Buchanan, Magnaltus Consulting

One of the most important steps in properly setting up a business and protecting the business before you engage in business activity is to obtain a commercial insurance policy. Insurance policies can include a wide range of different coverage with varying financial values assigned to each type of coverage. The best commercial insurance policy will depend on the size of the business, the industry in which the business operates, the type of products and services offered, and the risk preferences of the owner.

Getting an appropriate commercial insurance policy isn’t as simple as choosing a commercial general liability policy, there are several different types of insurance that may be needed in addition to general liability. Some of the most common types of commercial insurance include:

• General Liability Insurance – protects against claims for bodily injury, property damage, and personal injury arising from business operations.
• Commercial Property Insurance – covers physical damage to a business’s property, including buildings, equipment, and inventory, from perils like fire, theft, or natural disasters.
• Business Interruption Insurance – provides financial coverage for lost income if a business is temporarily closed due to a covered loss, such as a fire or natural disaster.
• Professional Liability Insurance – also known as errors and omissions insurance, protects businesses providing professional services against claims for negligence, mistakes, or failure to deliver promised services.
• Cyber Liability Insurance – protects against financial loss resulting from cyberattacks, data breaches, and other cyber-related incidents, including legal fees, data restoration, and regulatory fines.
• Workers’ Compensation Insurance – Covers medical expenses and lost wages for employees injured or ill on the job and is issued through the Saskatchewan Workers’ Compensation Board.

In the case of a restaurant, the business may require multiple forms of coverage including: commercial general liability insurance, commercial property insurance, business interruption insurance, commercial vehicle insurance, employee extended health benefits insurance, Workers’ Compensation insurance, and cyber security insurance.

On the other hand, someone conducting business as an online language tutor may not see the need to purchase any commercial insurance coverage at all. However, even simple home-based businesses should inform their home insurance provider that they are conducting business activity from their home, as residential home insurance policies typically do not cover commercial activity.

For a professional service provider that works from home and doesn’t have commercial property to insure, professional liability insurance is often the most important type of coverage. General liability insurance and cyber insurance are also important, especially in cases when personal or sensitive information is being collected from clients.

The timing to purchase a commercial insurance policy is usually at the discretion of the owner of the business. Oftentimes, a commercial insurance policy isn’t mandatory, however, some clients, professional associations, and other governing bodies or institutions may require proof of insurance in order to work for them or be associated with them.

Each form of coverage does not need to be purchased individually, one commercial insurance policy can combine various forms of coverage. It is also important to be aware of annual insurance policy renewals to keep your insurance policy active and also to make changes as the needs and operations of the business change.

Commercial insurance policies can be purchased from any commercial insurance broker, whether online or at an insurance brokerage office that is convenient for your business. Be sure to obtain records of your insurance policy and obtain a certificate of insurance in case you ever need to provide it to a governing body or client.

Sources:

Common Types of Business Insurance – https://www.ibc.ca/insurance-basics/business/types-of-business-insurance-coverage