Types of Insurance Coverage Your Business Needs
Apr 7, 2016 5 minute read
At BrokerLink, we can help you understand business insurance and help you find the types of coverage your business needs.
By reviewing this guide, you are one step closer to understanding your business’s insurance and what you should be covered for.
Business General Liability Insurance
This coverage protects your business from financial losses your company may experience should you be sued because of property damage, injuries or death caused by your services, business operations or your employees. Some forms of liability coverage to consider include:
This coverage with provide protection against lawsuits alleging that an employer’s negligence is responsible for a job-related injury.
Employment Practices Liability
Hiring, promoting and terminating employees can lead to complaints of wrongful dismissal, discrimination and human rights violations. Claims of this nature are not covered by general liability policies. Employee Practices Liability can protect your business from such risks.
Employee Benefits Liability
This coverage can protect your business in the event your company is held liable for claims arising from the administration of your employee benefits program. In the event of a loss due to improperly counselling plan participants; handling records carelessly, failing to enrol or terminate employees or improperly interpreting coverage, your company may be covered through Employee Benefits Liability.
Directors and Officers/Management Liability Insurance (“D&O”)
Considering the number of laws which impose potential liability on Directors and Officers of corporations, adequate coverage is important.
Although shareholder lawsuits against Directors and Officers are most common, there is an increasing number of claims that have been instigated by individuals or groups who are not shareholders such as employees, government bodies or agencies, contractors, customers, competitors, professional and public activist groups.
Legal Expenses Liability
For added protection against a liability claim your business can add coverage to cover costs such as:
- Legal Fees
- Disbursements and out-of-pocket costs including court fees, expert witness fees, medical reports, etc.
- Adverse costs when awarded against the insured or settled between the parties.
This could include legal issues experience by your company such as:
- Employment disputes
- Statutory license protection
- Physical damage to property
- Tax audit or appeal
Business Property Insurance
Whether your building is owned, rented or leased, your BrokerLink broker can identify the right coverage and the limitations of the coverage for your business property.
Remember: if any of your properties are vacant for longer than 30 days, let your BrokerLink broker know as it will affect your coverage.
Here are some additional types of coverage to consider when choosing your business property insurance:
Builders Risk Insurance
This coverage insures the value of a building during construction. The structure, materials, equipment and supplies are all covered under this policy if they are used to build part of the finished project. Construction contracts should be reviewed to determine if the contractor or owner is responsible to insure the project while under construction.
By-Law Policy Insurance
Most major property losses do not destroy the entire building. Many jurisdictions have by-laws that may require your company to demolish the remaining portion of the building or that state your building must be rebuilt to different specifications according to current building code requirements. Standard business property policies exclude the extra costs associated with the operation of a by-law.
Commercial Flood, Earthquake and Sewer Backup Insurance
If your business is at risk of flood, earthquake, sewer backup as these additional risks are not covered in your standard business property policy. Contact your BrokerLink broker to discuss coverage alternatives.
Equipment Breakdown Policy
Your business insurance excludes the breakdown of equipment as a result of explosion or rupture of pressure vessels (boilers, hot water tanks, compressors, etc), mechanical failure (or air conditioning systems, motors, electrical switchgear, etc) and electronic equipment failure (telephone, fax, phone systems, photocopiers, etc). The exclusion applies not only to the damage sustained by the unit itself, but also to the damage sustained by the building, improvements and contents.
Cyber Risk Coverage
Today’s online digital world offers convenience, accessibility and speed. It also makes users vulnerable to cyber attacks, such as viruses, data breaches and identity fraud. Cyber Risk Coverage can help protect your business against the financial effect of these cyber attacks. Check out Cyber insurance for your business for more information.
A property policy is intended to cover items (including tools) kept and used at the insured premises. Hand tools that leave the premises and are used at other locations can be covered under a “Tool Floater.” This is a broad form of coverage designed to insure unscheduled tools at job sites and in transit.
Business Auto Insurance
If a vehicle is being used for business purposes, your company will need Commercial Automobile Insurance. Read our blog Protect your commercial vehicle fleet for more details.
The use of your vehicle is an important factor in how an insurance company determines your premium. Always ensure the use of the vehicle and the territory it operates in have been discussed with your BrokerLink broker to ensure you have proper protection.
If you or your employees use personal vehicles for business purposes, the insurance company must be notified of the use. Your vehicle will be rated accordingly and have the appropriate commercial endorsement(s) added.
Business Interruption Insurance
In the event of a fire or other incident that results in you having to halt or cease operations, business interruption insurance can help cover the costs of lost revenue and additional expenses associated with being temporarily shut down, including employee wages. If you don’t already have one, creating a risk management plan can be useful to refer to during an unexpected event.
Crime coverage can provide protection against things such as:
- Employee Dishonesty. This will protect your business in the event fraudulent or dishonest acts are committed by an employee, either alone or in collusion with others, excluding partners. More details can be found at our blog Employee dishonesty: is your business covered?
- Depositors Forgery. This provides coverage to a person or corporation to protect against losses by reason of forgery or alteration of any cheque, draft, etc.
- Inside/Outside Robbery and Hold-up. This provides coverage from loss of money and securities at your business or outside of your business.
- Money Orders and Counterfeit Paper Currency. This provides coverage for loss arising from the acceptance of counterfeit, forged or altered money or money orders that are not honoured at your bank.
When you purchase insurance, included in your policy is a specific amount of liability coverage. However, the amount of this liability coverage may not always be enough to completely cover you in certain situations. Umbrella insurance could come to the rescue by covering the remaining amount. Learn more about Umbrella Insurance here.
Co-insurance is a clause in a property insurance policy where both the policyholder and the insurance provider share the risk in the event of an under-insured loss. When you do not fully insure your property and contents to 100% of its value, if you incur a partial loss, you will only be covered for the elected percentage (not the total) of that loss. Learn more here.
Your insurance should be as unique as your business. At BrokerLink, we provide customized insurance for several industries. To learn more, click here.
Put this knowledge to work for your business. Connect with your BrokerLink broker to discuss your company’s insurance needs and how we can help protect you and your business.