Money Bare Basics: Business Insurance Must-Haves For Canadians

Published on November 15th, 2013 | by J Davies

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Bare Basics: Business Insurance Must-Haves For Canadians

Giving Yourself Adequate Cover 

As a responsible business owner, you cross your “i’s” and cross your “t’s” with maintaining safety standards in your place of business and keeping your finances in order. You also try to save money wherever possible.  However, pinching pennies on insurance coverage is a risky proposition.

That said, if your budget is tight, you can save money by concentrating on obtaining insurance coverage in five critical areas: commercial general liability, business interruption, income replacement benefits, loss control benefits and OPCF 43 –removing depreciation deduction.  Maintaining adequate coverage in these five areas is critical to protecting your business from possible legal liability. Your insurance broker can provide guidance on how much coverage you need in these critical five areas. 

Commercial General Liability 

Commercial general liability insurance protects you from legal action connected with injuries suffered in and around your place of business. For instance, if a customer or client slips and falls on a slippery floor on your premises, without proper coverage your legal liability could run into thousands, if not millions of dollars. Needless to say, just one such accident could bankrupt your business.

Business Interruption 

If your place of business catches fire due to a short in an electrical cord, business interruption insurance would compensate you for any loss.  This compensation includes coverage for loss of earnings as well as expenses associated with continuing operations. Without such coverage, every day that your business is unable to operate will result in lost revenues that you may never be able to recover.

Income Replacement Benefits

If you are injured on the job and unable to work, income replacement benefits will replace up to $1,000 CA of lost wages so that you are able to cover your basic expenses. This coverage is applied over and above any employee benefit plan that you may already have. Your insurance broker can determine whether you should obtain this coverage, and if so, how much you should purchase.

Loss Control Benefits 

Your insurance coverage can also include discounts for measures that you have taken on your own. For instance, you may gain a reduction in your business insurance premiums if you have installed an alarm system to guard against fire or burglary, your insurance premiums. Depending on the amount of the discount you receive, you could recoup most or all of your initial investment.

OPCF 43 – Removing Depreciation Deduction 

If your business has company cars, or if you and your employees use their personal vehicles for business purposes,  OPCF 43 – removing depreciation deduction coverage is designed to provide compensation for replacement – rather than depreciated – value for vehicles involved in  accidents while they are being used for business purposes. For instance, if your five-year-old car is totaled in an accident while you are engaged in your company’s business, this coverage would provide compensation for the replacement value of your car or a similarly equipped model. Likewise, if you still owe money on your car, this coverage would provide sufficient compensation to cover the amount that you still owe rather than the car’s actual value.

George Nesler has run a small business in Canada for a number of years now. When he has some free time, he likes to help others by blogging on the Internet.


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