Business loss prevention in Canada

Business losses usually come from similar places, like a fire, theft, injury or cyberattack. Loss prevention is what deals with these everyday failure points. While it doesn’t try to account for every possible event, it generally focuses on reducing how often problems occur and limiting the amount of lost revenue when they do.

Below you’ll find a checklist that’s written for Canadian businesses and for how businesses actually operate. It looks at common risks one area at a time and focuses on effective loss prevention strategies that can help you prevent them.

What is a loss prevention program?

It’s a practical outline of how a business tries to prevent losses before they happen and reduce the damage if they do, supported by business insurance when a loss does occur. While loss prevention procedures are common in retail businesses, it’s relevant in other business settings, too and can help prevent issues that affect reputation and customer confidence. It can also lead to better employee training and customer service, not just cost savings.

How to use this checklist

This checklist works best when it’s treated as a working tool and not as a one-time exercise. Each control is meant to be something you can check, assign and come back to. For each control, use the following score:

• 0 — Not in place

• 1 — Partially in place or informal

• 2 — In place and tested

But scoring will only help if the ownership is clear. Every preventive measure should belong to someone, whether that’s Facilities, IT, Operations, Finance, HR or Health & Safety. When no one owns a step, it’s easier for it to fall out of date as people or processes change.

It can also help if you decide on a review schedule. Many businesses like to retest important measures each quarter and do a full review once a year. Because requirements can vary by province, lease terms, industry and insurer, it may be best to use this checklist as a baseline that you can adjust to match your business.

Risk area: Property and fire

Fire losses usually grow because something that should have worked didn’t. Sometimes a system wasn’t tested. Other times, it was taken offline and never fully restored. In many cases, the issue isn’t a lack of equipment, but a lack of follow-through.

Minimum controls

Ensure you check that the following are always on, visible and working:

• Smoke and heat detectors tested per code, with results recorded

• Clear exit signage and unblocked fire doors

• Regular waste removal and proper storage of flammables

• No daisy-chained extension cords or power bars

• Fire-resistant storage and off-site backups for paper records

Next-level controls

Sprinkler and standpipe systems usually aren’t the problem by themselves. Issues show up when inspections get missed or a system is taken offline and no one is quite sure what those changes are. If a system isn’t fully working, staff need to know what’s different and how long that situation is expected to last.

Contractor work introduces additional risk. A hot-work permit program sets expectations before welding, cutting or grinding begins and a documented fire watch makes sure conditions are safe after work ends. For critical equipment, surge protection helps limit damage and having spare parts on hand for single points of failure can make the difference between a short interruption and a long one.

Note: Keep test logs, inspection certificates and contractor permits on file for two to three years.

Risk area: Water and weather

Weather and water damage are two of the most common and costly financial losses for many businesses. The Insurance Bureau of Canada notes that insured losses for commercial businesses in 2024 reached over $1.8 billion because of severe weather that included flooding, wildfires and hail.

Minimum controls

Check the following:

• Leak sensors with alerts in high-risk areas

• Annual roof inspections and cleared drains

• Tested sump pumps and backwater valves where needed

• Snow and ice management plans

• Routine checks of windows and doors

Next-level controls

You should always have:

• Automatic shut-off valves tied to sensors can stop water quickly

• Water alarms tied to after-hours call trees help alerts reach the right people

• In server rooms, elevating racks and sealing floor openings reduces damage if water does enter

• Subscribing to local weather alerts and using a simple pre-storm checklist helps secure signs, outdoor equipment and other loose items before conditions worsen

Some types of water damage are covered under standard property insurance, while others depend on added endorsements, such as sewer backup or overland water. It’s always a good idea to review your policy so that you’re familiar with any water exclusions and endorsements.

Risk area: Theft, fraud and crime

External and internal theft and fraud usually don’t start with a break-in. Instead, they often start when someone already has access and no one notices a system change that shouldn’t have been allowed to happen. Things like surprise audits can make it easier to spot theft, fraud or operational errors that might otherwise go unnoticed.

Minimum controls

There are multiple ways to secure your belongings, such as:

• Reinforced doors, proper locks, lighting, and protected ground-floor glass

• Monitored intrusion alarms covering all entry points

• Separation of duties and regular inventory counts

• Clean-desk practices, lockable cabinets and visitor logs

• Careful hiring practices, including background checks

• Employee training on spotting suspicious activity and handling data

Next-level controls

You can also:

• Split up tasks instead of having one person handle everything to make things like internal theft or administrative errors easier to spot

• Access control measures to restrict sensitive areas to authorized personnel only

• A clear inventory management system for tracking what comes in and goes out to make theft easier to spot

• Regularly clean up keys, cards and logins so people don’t keep access after their role ends

• Installing security cameras can help and they are most useful when footage is kept long enough to review

• Security guards add a visible presence that can help deter theft by both customers and employees

• Electronic article surveillance (EAS) tags and exit sensors help discourage theft and flag unpaid items at exits

Many fraud attempts start with a request that doesn’t immediately look out of place. Regular loss prevention training can teach and remind staff to question and verify unexpected requests using a known phone number and to require a second approval to reduce the chance of sending money or information to the wrong person.

Learn more about how crime insurance can help you recover after employee theft and other crimes.

Risk area: Cyber and data

Cyber incidents succeed when basic controls are missing or never tested. Smaller organizations are frequently targeted because controls are inconsistent, as noted in the 2024 survey by the Canadian Internet Registration Authority.

Minimum controls

Preventative measures include:

• Multi-factor authentication for email, VPNs and privileged accounts

• Endpoint protection with regular patching

• Offline or immutable backups with quarterly restore tests

• Role-based access and prompt off-boarding

• Phishing training and easy reporting

Next-level controls

Cyber issues are often discovered late, when several problems have already piled up. Regular scans can help catch those earlier, while they’re still easier to deal with. When something does happen, the hardest part is often figuring out who to call and what to do first. A simple incident response runbook gives people a place to start, with current contact details for internal leads, outside IT support, legal counsel and the broker.

Third-party access is another quiet source of risk. Integrations and vendor accounts tend to accumulate over time unless they’re reviewed. You can reduce this risk by:

• Limiting access to what’s actually needed

• Blocking access from unexpected locations where possible

• Keeping less personal information than you think you need

Risk area: Health and safety

Many workplace injuries happen because a hazard was already there and never fully dealt with. In Canada, the basics around identifying and fixing those hazards are set by provincial and territorial safety rules and are supported by federal guidance from the Canadian Centre for Occupational Health and Safety.

Minimum controls

Safety should always be a priority. Make sure to have the following on hand:

• Documented hazard assessments and near-miss reporting

• WHMIS training, first-aid kits, trained personnel and eyewash stations

• Slip, trip and fall controls, including winter entry protocols

• A joint health and safety committee

Next-level controls

Take a look:

• Contractor safety vetting, confined space or lockout procedures where needed to help reduce risk

• Annual drills for fire or severe weather to help people respond more calmly

• Automated external defibrillators (AEDs) add another layer when maintained and logged.

• Corrective actions should be tracked until they’re actually completed.

• Looking over incident trends to help identify patterns.

Commercial general liability coverage may apply to third-party injuries. A local insurance broker can help explain how that fits your situation.

Risk area: Operations and continuity

Many businesses have coverage for interruptions, but when something actually happens, there isn’t always a clear plan for how work restarts. Without agreed-on recovery targets, decisions can drag on and downtime can stretch for much longer than expected.

Minimum controls

When operations stop, the first question is usually what needs to come back online first and what it depends on. Having that mapped out ahead of time makes it easier to focus on the few processes that matter most instead of trying to fix everything at once.

It also helps to be clear about how much downtime is acceptable and how much data loss is tolerable, so teams aren’t left guessing under pressure. Once those priorities are set, alternate ways of working become more useful. Remote work options, secondary locations, vendor contact lists and simple manual workarounds can help keep things moving while systems or spaces are being restored.

Next-level controls

You can also:

• Mapping key suppliers, including critical second-tier dependencies, can highlight where disruptions are most likely

• Pre-negotiated alternates can reduce scrambling during an event

• Priority spare parts and pre-arranged mobile equipment rentals can shorten recovery

• Walking through a disruption once a year can help teams spot unclear roles and missing steps while there’s still time to fix them

Risk area: Contracts, compliance and professional risk

Contracts and paperwork don’t always keep pace with real work and that mismatch usually shows up when there’s a dispute.

Minimum controls

Ensure that you review:

• Collecting certificates of insurance from vendors and tracking so renewals don’t lapse

• Basic contract language, including hold-harmless and indemnity clauses, should be reviewed and change orders should be handled consistently

• Privacy policies should reflect actual practices

• Breach notification steps should be understood before they’re needed

Next-level controls

Outline the following:

• Clear scopes, disclaimers and limits for professional services

• Data-processing agreements with third parties to make responsibilities clearer

• Document retention and legal hold procedures to help preserve records when any issues arise

Risk area: Fleet and drivers

When vehicles are involved, losses often mean damage, injuries and liability. According to Transport Canada, distracted driving was linked to roughly 22.5% of fatal collisions and 25.5% of serious injuries. On top of that, snow, ice and wet pavement are associated with about 30% of reported crashes, many of them during peak winter months.

Minimum controls

You should make sure to:

• Annual motor vehicle record checks with documented follow-up

• Clear distracted-driving and impairment policies, with signed acknowledgements to show they were communicated.

• Maintenance logs and seasonal tire policies to help keep vehicles road-ready

• Driver Vehicle Inspection Reports (DVIRs) for commercial units

Next-level controls

Also:

• Adding telematics can help highlight speeding or harsh driving patterns and support coaching

• A crash review board can help identify patterns

• A standard post-collision kit to help drivers know what to do in the moment, including what to document and how to deal with the scene safely.

Learn more about commercial auto insurance for company vehicles and non-owned auto insurance for employee vehicles used for company business.

Score your results

Once you’ve worked through the checklist, add up the scores within each risk area to see where risk is clustering. It may help to sort the risk areas from lowest to highest score:

• Lowest scores usually need attention first

• Middle scores often point to inconsistency

• Highest scores still need regular testing, so controls stay in place

When deciding what to tackle first, start with anything tied to life safety or a single failure that could shut operations down. From there, focus on issues that happen often, like water or cyber problems. Administrative clean-up can follow. If a few low scores keep coming up, you may want to consider reviewing your next steps with an experienced loss prevention specialist.

Contact BrokerLink today

If you want to review how these measures line up with your current coverage or if you’re looking for some tips on implementing loss prevention strategies, a BrokerLink commercial broker can walk through the checklist with you and help identify any gaps between your operations and insurance coverage.

You can reach us by phone, email or in person at any one of our locations throughout Canada.

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