Whether your business is incorporated, registered, with or without employees and no matter what field of activity you’re in, your company needs insurance!

Business-line insurance, commonly referred to as “commercial insurance,” applies to both large and small businesses, as well as certain self-employed workers.

Who needs it?

Lynne left a career as a human resources manager to start her own studio designing clothing from recycled materials that she runs out of her apartment. Like many young entrepreneurs, Lynne is reluctant to take out business-line insurance. But what happens if she is a victim of theft? Lynne’s personal property will be covered by her home insurance. However, if she has not declared that she works from home, Lynne’s sewing machine, her raw materials and finished inventory, as well as her work computer may not be covered. This is why it’s important to always check with your general insurance broker if you need additional coverage for your professional property.

After considering the cost of business-line insurance, Lynne thought that it would be cheaper in the event of a claim to replace any lost equipment and her computer than to take out a business-line insurance policy. Yet, she had not considered the civil liability portion of commercial protection. What would happen if Lynne finds herself faced with legal proceedings related to the use of her creations? Business-line insurance would also cover Lynne’s potential loss of income or relocation, if necessary.

In short, business-line insurance applies to all entrepreneurs, regardless of the size of their business and the type of their commercial activity. Although business-line insurance is not mandatory, it could be required by a financial institution if the entrepreneur wishes to take out a loan.

To every business its insurance policy

The advisory role of the general insurance broker is very important in business-line insurance since each company faces different types of risk depending on their vocation. These risks include:

• Property damage
• Operating losses due to business interruption
• Theft, embezzlement by employees
• Civil liability to cover damage caused to others

Civil liability also covers any damage caused to the premises the company rents.

Depending on their sector of activity, some entrepreneurs may require tailor-made coverage. Others, such as retailers, may be insured under a policy that includes certain basic and additional types of coverage common to their type of business. The self-employed can sometimes get adequate coverage by simply adding an endorsement to their home insurance policy.

A certified broker in commercial insurance is the professional most suited to helping entrepreneurs analyze their needs, informing them of the risks and proposing appropriate coverage. A broker will also inform entrepreneurs of the insurance policy’s limitations and exclusions.

Costs

Premiums are generally set according to the type of business, the nature of the risks and the needs of the insured. After all, business-line insurance is crucial protection that ensures your business’s continuity and protects your investment.

Renewing business insurance

Like any other insurance renewal, renewing a business insurance policy must not to be neglected. This is a great time to validate that your current insurance coverage continues to meet your company’s needs. To prepare, read the article Renewal of a Business-lines Insurance Policy for a list of questions to ask yourself before contacting a general insurance broker.

By the Chambre de l’assurance de dommages (ChAD) partner of Protégez-Vous, published online on June 11, 2018.