What is Business Insurance and How Much is Business Insurance | Cowan

Your small business should be able to focus on delivering excellent service or products rather than on how to pay for damages to your roof caused by wind damage or a fire. The proper Business Insurance coverage can give you peace of mind that you won’t have to pay out-of-pocket costs when things go astray.

Business Insurance protects you against everyday risks that could cause significant financial harm to your company. It typically could be structured and protected from lawsuits, stolen or damaged equipment, business interruption, sewer backup, and damage to business contents or commercial automobiles.

No law in Canada requires a business owner to secure insurance, but it is in the best interest of business owners of all sizes to have it.

You may wonder what types of businesses require insurance. The answer is all of them! No law in Canada requires a business owner to secure insurance, but it is in the best interest of business owners of all sizes to have it. Even an independent contractor or freelancer who runs their business from their home should consider buying Commercial Liability Insurance. This also includes low-risk industries with expensive cameras or computer equipment. There’s a good chance that home policies exclude business coverage for expensive equipment used for your business if there is a loss—that’s assuming the insurance company knew the business was being conducted from home. Always advise your insurance company and clarify your home insurance policy coverages if you plan to operate a business from home.

How much is Business Insurance?

The top factors affecting small Business Insurance pricing include business location, which plays a significant role in your business rates. For example, if your business is located somewhere more prone to extreme weather conditions like floods, snowstorms etc., your business is at a higher risk of structural damage, and your rates will be higher than someone who isn’t. High crime areas that are more at risk of vandalism and theft will also have higher rates. The nature of your business and its inherent risks will also impact what you pay for insurance. The more risky your business, the higher the insurance cost will likely be.

The more risky your business, the higher the insurance cost will likely be.

Certain types of companies are at a higher risk than others. For example, an esthetician that offers laser service is at greater risk of being sued than a bookstore owner. Your claims history plays a part in your rate as well. Any prior claims your business has had will affect your insurance costs and your overall chance of getting insurance. A key factor impacting Professional Liability and Commercial General Liability insurance pricing is the number of employees. The more employees you have, the higher your premiums will likely be.

Additionally, premiums paid by some businesses, such as automotive garages, salons, or spas, are partially rated based on the number of full- versus part-time employees. And finally, your annual income will also affect how much you pay. A higher income means you will likely have more clients and potentially more significant risk exposures, hence higher Business Insurance premiums.

What can you do as a business owner to reduce your small Business Insurance premiums?

Here are some tips that may help you save on your Business Insurance premiums:

• Review your coverage. Ensure your insurer has the most updated information about your company and employees. For instance, if you have a commercial auto policy, ensure the drivers’ information and vehicle lists are correct. More importantly, confirm that your business has the appropriate level of coverage. For example, do you want Collision and Comprehensive coverage if you have older vehicles?
• Minimize risk exposures. Try to adopt risk-reduction measures such as adding security systems to your vehicles and buildings and adding sprinkler systems in an old building, warehouse, or production business.
• Enhance workplace safety. Provide onsite safety training to your employees to perform their jobs more efficiently and safely. Add safety operation plans to minimize workplace hazards. For commercial fleet operations, hire employees with three to five years of driving experience, offer onsite training, or consider sending employees on a defensive driving course and ensure they wear seat belts.
• Rent or purchase a newer building. If the building is more than 15 years of age, make sure it has updates to the plumbing, roof, or electrical.
• Consult a licensed insurance broker for the best premiums and the most appropriate coverage.

Cowan Insurance Group has access to over 100 markets and offers an in-house claims department. Our team of experts will take the time to understand the characteristics of your business and provide tailored solutions to meet your unique business challenges.