Insuring your New Business
Starting a new business can be an exciting, daunting and ultimately rewarding experience. As you start to invest time and money into your business you should consider looking at insurance which can help protect your investment, and ensure you can start your business with confidence.
The first step of insurance is finding the right insurance professional for you. Business insurance needs to be tailored to fit your business so it is essential to find the right professional to help you. They will walk you through the process of obtaining business insurance and ask the right questions to find out exactly what coverage your business will need. Although price is important as you try to keep your costs down, you want to ensure you have the right coverage, or else the money you have spent on insurance is wasted. Don't be afraid to reach out to multiple insurance companies, as typically most companies offer packages for common business types.
Every insurer will ask you different questions but the basic ones are: what type of business are you are starting, is it incorporated, how much experience you have doing this type of work, how much your expected gross revenues will be for your first year, what geographic area you will be working in (ie Toronto), how many employees you will have, if you have any tools, stock, equipment (including office equipment, furniture, desks, computers etc), will you subcontract any work, and will you be renting/leasing any buildings.
Once you receive a few quotes, you sit down to compare them, but what exactly are you comparing? Here are a few things to look for:
Liability - The most important part of any insurance policy is liability, especially with business insurance. Liability is the core of any policy as it protects you financially if you damage a client's property or injure someone during the course of your business. As an example if you are a landscaper and you damage a waterline while digging a new garden. Without insurance you would be responsible to replace the line, which can cost a few thousand dollars. You want to ensure this covers all of your operations. If you are considered a professional, you will also need to insure your professional liability.
Contents - This can include stock, tools, equipment, office furniture, shelves, computers, etc. You should make a list of what will be staying on your property vs what will be leaving, as the basic policy will only cover the contents while they are on your property, but this can be extended to cover anywhere in Canada.
Building - Will you be renting a building? Buying a building? Using one you currently own? It is important to include the building you are working out of, even if you are just renting it as you may be liable for any damage that occurs to the building.
Loss of Income - What will you do if your building burns down or if all your contents are stolen? How will you pay for the bills your business is incurring with no income? Most policies offer coverage for lost income, which will pay for the business expenses and/or profits after an insured loss.
Crime - A major exclusion from contents coverage is money, securities, jewellery, paintings etc. Crime covers these items as well as if your employees steal from you. Coverage for these items can be added to your policy at your request.
Automobile - If you use your personal car for your business you need to change the use with your insurance company. Failing to do so means the company can deny any claim you have. If your employees use their own vehicle in any way for your business you should have a Non-Owned Auto extension on your policy.
Cyber - Most businesses have a lot of information about their clients, and are responsible for keeping this information safe. If your computer system is compromised, or you lose a document with private client information you may be liable for it.
The above list is a very basic list to get you started with exploring insurance for your new business. If you would like a quote or have any questions please give our office a call 905-623-4406 and one of our experienced brokers would be happy to help discuss the right coverage for you.