Get the Best Business Liability Insurance for April 2024
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Being a business owner in Canada means embracing risk. That is why general business liability insurance should be a crucial part of your business plan. It can be the difference between your business surviving or succumbing to financial ruin in the event of a loss.
Canadian business owners agree that having to pay to recoup losses can be extremely costly and sometimes be the downfall of the financial health of a business. For example, did you know that you can be sued and legally liable if a customer injures themselves on the premise of your business?
Keep reading as our guide will deep dive into liability insurance, why you should purchase a business liability insurance plan and how much you can expect to spend on business liability insurance premiums.
What is business liability insurance?
Business liability insurance, also referred to as general business liability, is one of the most basic forms of business insurance. It protects the financial interests of companies and business owners if they face formal lawsuits or any third-party claims. If the business was found legally liable for injuries or property damage caused by your product, or an accident on your premise, a business liability policy would cover any direct financial liabilities incurred, as well as any legal defence expenses in the event it led to a court case.
Business liability insurance can be an affordable way to protect your business in case you ever have to defend a claim against your business in court. The policy will provide funds up to your policy limits to cover damages assessed by the courts to compensate third parties and cover legal defence fees and settlement charges.
Comparing business insurance quotes and coverage is essential for saving money and protecting your business.
Better protection for your business today
What does business liability insurance cover?
Business liability insurance will cover you for risks you are exposed to as a business owner and will vary based on the size of your operation, industry or profession. In general, business liability insurance provides coverage for:
- Bodily injury
- Property damage
- Personal and advertising injury including slander or libel
- Medical expenses
What does general business liability insurance not cover?
You finally take the leap and open your own small business. As a business owner, you know it is in your best interests to take out a business liability insurance policy to protect you from basic losses such as bodily injury or medical bills a customer sustains being on your property or using a product. But what does it not cover?
A general business liability insurance policy is exactly that. A general insurance policy. And while it will financially protect you from general losses, there are so many other perils your business may encounter.
Some examples of perils that would not be covered under a business liability policy are:
- Damage to your property from either vandalism or natural disaster
- Errors and omissions made to a customer from your business
- Cyber or data protection for you and your customers
- Claims of negligence
Talk to a trusted broker to make sure your business is prepared for any loss that may occur.
Better protection for your business today
Is general business liability insurance mandatory in Canada?
In Canada, general business liability insurance is not a mandatory requirement for you to run your business. However, it can protect you from many of the common risks you encounter in your day-to-day operations and cover costs should you be exposed to a lawsuit. When deciding whether or not to purchase liability coverage, consider your profession and the risks associated with your profession.
For example, if you are a contractor who builds homes, you may frequently be asked to require to provide proof of insurance before the contract can be secured as your profession is seen as riskier. On the other hand, if you work from home as a copywriter, while your profession is seen as much less of a risk, you could still find yourself in a situation where you can be sued for personal or advertising injury including slander or libel. Having a general business liability insurance policy would cover you in both cases.
How much general business liability insurance do I need?
As with any type of insurance, the amount of business liability insurance you need will heavily depend on:
- Industry
- Location
- The risk profile of your business
Our same philosophy for finding business insurance also applies to determining how much general business liability insurance your business will need:
- Inventory your business’ risks. Create a list of potential losses or liabilities. This includes any customer injuries that could occur from your premise or your products and/or personal and advertising injury.
- Find a way to reduce premiums. Ask your broker what you can do to lower your premiums. Cutting corners by excluding a policy you need can be financially detrimental. Instead, ask about discounts for purchasing multiple policies from the same provider or consider steps you can take to reduce your risk profile.
- Work with a broker that understands your industry. Business needs differ from industry to industry you want a broker who has experience selecting the right policy for businesses like yours.
Once you have determined the risks you need to have insured, then an expert can help you to determine which policies are best suited for protecting your business.
How much does general business liability insurance cost in Canada?
On a business liability policy for a small business, you should anticipate spending approximately $450 annually for a $2 million coverage limit. However, if your business is in Ontario, you should expect to pay closer to $650 per year for $2 million in coverage.
Check out our breakdown of the price of business liability insurance per province (assuming medium-sized small businesses with a $2 million annual coverage limit):
| Province | Estimated premium |
|---|---|
| Alberta | $650 per year |
| British Columbia | $996 per year |
| Newfoundland | $650 per year |
| Ontario | $650 per year |
| Quebec | $730 per year |
However, keep in mind that the cost of liability insurance depends on the amount of coverage you want to have for your business. The larger the business and riskier the business is, the larger the premium will likely be.
The following factors are taken into consideration when determining the cost of your premium:
- Business size and location
- Years of experience
- Annual and projected gross revenue
- Number of employees
- Insurance claims history
If you need to purchase business insurance for your small business, contact a broker to discuss exactly what insurance you need for your business. From there, they will help compile a quote for you and assist you with purchasing and activating your policy.
Can I bundle other business insurance with my general business liability insurance policy?
Yes! Bundling insurance policies is a great way to save. Talk to your insurance broker or advisor.
If you are a business owner that owns a computer repair shop, for example, you would want to have a general business liability insurance plan to protect you from injuries that may occur on your premises and libel, but you may also want cyber insurance that will protect in you the event your data and your customer's data from their computers gets hacked.
Some companies allow you to bundle small business insurance and save you money while providing coverage for a variety of situations. Talking to your broker or insurance company can potentially save you money and hassle by having multiple policies under one umbrella.
Some companies allow you to bundle small business insurance and save you money while providing coverage for a variety of situations. Talking to your broker or insurance company can potentially save you money and hassle by having multiple policies under one umbrella.
Better protection for your business today
