Is Your Business Protected Against Lawsuits and Losses?
Could your business financially survive a lawsuit? What about a fire or flood? Does your small business have enough commercial insurance?
Lawsuits and losses can quickly add up, take money out of your pocket, and even cause the closure of your business. Commercial insurance protects you against the unexpected.
Western Financial Group, a 100% Canadian company, can help you navigate business, car, and home insurance during this period of economic uncertainty.
Did you know? You can save up to 10% on your business insurance with Western.
Here’s your insurance guide to protect your small business against lawsuits and losses
What are the top insurance coverages for small businesses?
Your small businesses needs commercial general liability insurance, commercial property insurance, cyber liability insurance, flood and sewer backup coverage, business interruption insurance and product liability insurance. These business insurance coverages financially protect your business against legal claims and losses that could force you to permanently close your doors.
What if I get sued? You need commercial general liability (CGL) insurance
Commercial general liability insurance protects your small business against claims of third-party bodily injury or property damage involving customers/ suppliers/members of the public. For example, a customer could slip and fall on a wet floor, get injured, and sue you.
If you were sued, CGL insurance would help cover the legal costs to defend the claim against your business in court, as well as costs to cover damages to compensate third parties whether you win or lose your case.
Without CGL insurance, you will be responsible for paying all the costs related to a third-party injury or property damage.
What does CGL insurance help cover?
- Injury to a third party who is not your employee
- Damage to someone’s property
- Damage to rented property
- Medical bills if someone is injured
- Legal costs and settlement costs of liability lawsuits filed against you
- Liability lawsuits related to slander and libel
How is my business protected from theft or vandalism? Get commercial property coverage.
Whether you own or rent your business’s location, commercial property insurance protects your store and its contents from insured risks that can happen, such as fire, theft, burst pipe, theft, or vandalism.
If vandals smash a store window, commercial property damage would help cover the costs of replacing the window and cover any damage or vandalism inside your business.
Commercial property insurance does not automatically flood insurance. What if there’s heavy rain and the sewers back up and your business is flooded? Are you protected?
You should consider adding sewer backup or overland flood coverage extensions, which standard business insurance policies typically do not cover.
You’ll need to do an inventory of all your business property to determine how much commercial property insurance you will need for your business.
Commercial property insurance also protects your business from severe weather events, such as high winds, tornadoes, hail, and wildfires but ask for policy details about exact coverage.
How does commercial property insurance cover theft? Theft of stock is generally covered under the coverage for stock section in a commercial property insurance policy, protecting your business from financial loss due to theft of inventory.
Let your Western business insurance expert explain in detail what is covered under commercial property insurance.
How can small business owners save on their insurance with Western?
Western helps business owners save on their insurance with the following:
- Bundle and save: They’re generally available when you bundle liability, commercial auto, and property insurance.
- Multiple quotes to suit your needs: Western is a national insurance broker that partners with Canada’s leading insurers. We’ll get you multiple business insurance quotes to suit your needs and to help you save money.
- Cost: Depends on factors such as services provided, location and size, deductibles, revenue, and any past claims
What if my business’s computer system is hacked? Get cyber liability insurance
Cyber liability insurance is recommended if you have digital contracts and payments.
Cyber liability insurance will help protect your business financially in case of a cyber-attack. Depending on the size of the data breach and the information that was taken, the customers who are affected can hold you liable and sue you for damages. You may also have to pay for notification expenses to inform customers affected by a breach. That’s when cyber insurance can protect you financially.
At Western Financial Group, we help Canadian business owners understand what their commercial insurance covers and offer expert advice to make sure you’re protected for unexpected events.
What business insurance covers extreme weather?
Commercial property insurance covers damage to buildings, inventory, and equipment from certain extreme weather events such as storms, wind, hail, and wildfires. Coverage may vary by insurer and your location, so you need to review specific coverage for wildfire and natural disaster exclusions or limitations.
Most standard commercial policies exclude flood and earthquake. Coverage for floods and earthquakes are added as riders or separate policies.
What about weather-related floods?
A torrential rain has overwhelmed the local drainage system and leaves you with flooded premises or a river has flooded and your business has water damage. You need overland flood coverage added to your business insurance. Commercial property insurance typically does not cover this.
What about damage from a sewer backup?
Commercial property insurance does not cover a sewer backup. Sewer backup insurance is add-on coverage that helps protect you against:
- Backup from a sewer, storm drain, or septic tank
- Damage caused by sewer backups, which includes coverage for the cost of professional cleaning or replacing walls, flooring, furniture, and other belongings
- Overflow from a sump pump or other similar equipment.
My business needs to shut down temporarily due to a fire. What insurance can protect me in this case?
Business interruption insurance
Business interruption insurance helps support your business when it can’t operate due to a covered loss. Business interruption insurance can help you with bills such as repairs, rent, and payroll even if your business is forced to close temporarily.
Some examples of losses that can force your business to shut down:
- Your business is damaged by fire or vandalism
- A disruption in your supply change
- Damage to a neighboring business
Business interruption insurance can help with expenses such as:
- Payroll
- Rent
- Utilities
- Property taxes
- Alarm monitoring
- Relocation of your business
My business is getting sued because of a product my I sold
Product liability insurance helps protect you against liability claims and lawsuits arising from the products you sell and distribute.
If a product makes a customer sick, this type of insurance can help cover costs from a potential lawsuit.
It also protects your grocery store from damages from design, manufacturing, or marketing defects, such as incorrect labelling and safety warnings.
Let Western Financial Group help you protect your small business with commercial insurance
To sum it all up
Protecting your small business with insurance is just smart business. Ask yourself how much risk you can financially tolerate by being either underinsured or being without insurance. Lawsuits and losses are costly and take time away from your business.
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5 FAQs
What kinds of businesses need professional liability insurance?
Professional liability (errors and omissions) insurance is needed for businesses that provide services or advice, covering claims related to negligence, mistakes, or inadequate work that cause financial harm to clients. Doctors, dentists, lawyers, accountants, IT professionals, architects and engineers are examples of professions that need E & O insurance.
Should I underinsure my business to save money?
Underinsuring your business to save money exposes you to financial, legal, and operational risks. While underinsuring your business can help reduce insurance premiums, the consequences of underinsurance can be costly if a loss or claim exceeds the coverage limits. You can risk financial damage, reputational harm, and limited growth opportunities. Let Western Financial Group help you with your business insurance.
How often should I reassess my business insurance coverage?
Business insurance coverage limits should be reassessed at least once a year as part of a regular review to make sure coverage, limits, and deductibles match the current value and operations of your business. Coverage should be reviewed sooner whenever significant changes in your business occur, such as expansion or downsizing.
How do revenue changes affect the coverage limits I need?
As your business’s revenue increases, your risk exposure usually increases, requiring higher coverage limits to adequately protect your business. On the other hand, if revenue decreases your insurance coverage needs may need to be adjusted but should never be reduced below what is necessary for adequate risk protection.
When is choosing higher deductibles better than lowering coverage limits?
Choosing a higher deductible is generally better than lowering coverage limits when the goal is to reduce your premium but maintain adequate protection. You can choose higher deductibles rather than lowering coverage limits if your business can comfortably afford a larger out-of-pocket expense in case of a claim. Speak to a Western Financial Group business insurance expert about deductibles and coverage limits for your small business.
