Commercial insurance

Commercial insurance is a type of insurance that businesses buy to protect themselves financially and legally.

While businesses are not legally required to carry commercial insurance, they typically carry, at the bare minimum, what’s called commercial general liability insurance, which can cover costs in the unfortunate event of a lawsuit against them.

Another common type of commercial insurance in Canada is property insurance, which covers a company-owned building like an office, retail store, or warehouse and can recoup costs in the event of perils like fire, theft, and water.

Business owners should expect to pay between $500 – $5,000 in annual premiums. Yes, that’s a wide range, and it could wind up being higher. It’s a really tough question to answer because there are a lot of factors that determine the cost of a business insurance policy, starting with your company’s annual revenue, industry, claims history, and location.

Commercial insurance prices are set on a case by case basis and determined by your company’s profile — in other words, how much risk you pose to the insurer.

Insurance companies have the data to tell them things like which industries are responsible for the most claims and in which neighbourhoods occur the most theft. That’s why these bits of information affect your insurance rate.

One-person operations can certainly snag a policy as low as $500. On the high end? Massive corporations can fork over millions of bucks a year for their insurance policy.

Commercial insurance, also referred to as business insurance, is designed to cover your company’s assets against common perils like fire, water, theft, and liability.

Here are five of the most popular types of commercial insurance among Canadian companies:

• Commercial liability 
• Commercial property 
• Cyber insurance
• Professional liability / errors & omissions
• Marine Cargo

KBD Insurance can provide all these types of commercial insurance.

You’ll be better off with an insurance broker (over a direct insurance provider) if you have an intricate business that requires a deep level of knowledge. Insurance brokers’ job is to understand the details of your business and how it operates so it can provide the best service to you — that’s why we take on complicated accounts.

When you work with a broker, you’ll talk to the same person every time you call, email, or even text. That person is your first point of contact any time you need to file a claim or make a change to your policy. Contrast that with direct insurance companies, who hand out a 1-800 number, meaning that every time you call, you have to explain your file from scratch to whichever representative answers the phone.

Compare apples with apples!

We love to say that — but what does it mean? It means that when looking at quotes from two companies side-by-side, those two quotes have to be made up of the same coverage. Often when clients see a big discrepancy between two insurance quotes, it’s because the two policies’ protections aren’t the same. (Inevitably, the cheaper one may be more attractive, but it offers a lower grade of coverage.)

We see this happen all the time. When shopping around, be careful to request quotes for the exact same coverage from each company you talk to. Apples to apples.

To protect your business when the unexpected happens. 

Most businesses aren’t able to recover financially after a big loss; this is where insurance kicks in. It really needs to be part of your budget, because by the time something happens, it’s already too late. 

Aside from being a smart business move, carrying insurance legitimizes your company. As you grow, many vendors won’t even conduct business with you if you can’t show proof of commercial insurance.What’s important to understand — a lot of people don’t — is that an insurance policy is not a maintenance package. That means you shouldn’t use it to cover up every little blemish. We always say to avoid small claims — and you should. Because the more claims you make, the less insurable you become and the higher your future rates go. Commercial insurance really is there to cover the big stuff that you couldn’t possibly pay out of pocket.

There are two types of commercial insurance providers:

1. Direct insurance companies issue you a policy directly and only offer one insurance product, which is their own.
2. Commercial insurance brokers have access to multiple insurance markets and can shop around for you to find you the best fit. (KBD is an insurance broker.)

As a business owner, know that not all insurance companies in Canada offer commercial insurance. That means if you were planning to just call the company you have personal home or car insurance with, they might not have what your business needs.

The best advice we can give you? Shop around!

When you’re looking for business insurance, you should inform yourself, do your research, and make sure you’re finding yourself the best product at the best price. This applies especially to intricate businesses; if your company has a lot of moving parts, not all insurance companies will be equipped to handle your needs.

Business interruption is built for restaurants, manufacturers, and the like. Why? These types of businesses can’t operate after disaster strikes, like let’s say a fire or flood. Most service-based companies with employees working at desks could easily have everyone work remotely for a while before things go back to normal. A restaurant, on the other hand, would have to close down for an extended period of time. A business interruption insurance policy covers the cost of lost revenue in the event this happens.

What does it cover? Following a covered loss, there are three costs that can be recouped:

1. Loss of profits
2. Administrative payroll
3. Fixed costs

Fact: Two out of three businesses go belly-up after making a claim when they don’t have business interruption insurance.

In a nutshell: To shop the market, understand your business, and provide a personalized service. 

While neither the direct or the broker insurance model can be necessarily considered more expensive than the other, a broker differentiates itself in those three areas. You can certainly find cheap insurance online and with direct insurance companies, but you might not find personalization.

If your business requires a little more attention to detail, you’re better off with a broker. It’s the broker’s job to learn and understand the ins and outs of your company and industry, including the products you sell and the business you do outside of Canada. If you would consider your business intricate, you’d be better served going with a broker.

Why? A broker is trained to understand your business. And once you have one, that one person can stay on your account long-term. With direct insurance companies, you might call a 1-800 number and speak to a different representative each time — sort of like starting from scratch. With a broker, you get a real business relationship with someone that learns more about your file the longer you work with them.

A commercial insurance broker works as an intermediary between the insurance company and the client. Brokers have access to several different insurance providers, so they can shop multiple insurance markets to find the best fit for each client. That means matching the best price and protections for different types of companies that work in an array of industries.

A direct insurance agent works for a provider, so they can only sell you insurance from their company. These agents don’t necessarily maintain a file with each client; instead they must be equipped to handle any person that calls the company and gets patched through to them.

Property and casualty insurance!

Property insurance covers your physical assets.

Casualty — a fancy word for liability — covers your actions.