19 Types of Insurance Every Small Business Needs

Here at WB White, we can assist you in understanding business insurance and help you choose the right policy.

This guide will help you understand the various types of business insurance policies available to protect your business.

1. General Liability Insurance

You need this type of coverage in case you are sued for damages, injuries or death resulting from something your business has done, a business operation or actions by your employees. Here are some liability coverage options to consider:

2. Employer’s Liability

This policy will provide protection against lawsuits claiming that an employer’s negligence caused the injury. This coverage is usually required for businesses that employ individuals who are not WSIB eligible.

3. Employment Practices Liability

Human rights violations, discrimination and wrongful dismissal, can result from hiring, promoting and terminating employees. General liability policies do not cover claims of this nature. You can protect your business against such risks with Employment Practices Liability.

4. Employee Benefits Liability

It helps protect the company if it is held liable for claims arising out of the employee benefit plan administration. Your company may be protected by Employee Benefits Liability coverage if you fail to educate plan participants, mishandle records, fail to enroll or terminate employees or fail to interpret coverage properly.

5. Directors and Officers Liability (For and Not For Profit)

Considering that directors and officers of corporations can be liable under a variety of laws, it is important to have adequate protection.

Several individuals or groups other than shareholders have filed lawsuits against directors and officers in recent years, including employees, government agencies, contractors, customers, competitors and public advocacy groups.

6. Legal Expenses Coverage

Business owners can add coverage for the following costs to increase protection against liability claims:

• Fees for legal services
• The costs of disbursements, expert witness fees, medical reports and out-of-pocket expenses
• Amounts paid by the insurer to settle a claim for adverse costs

Your company may have experienced legal issues such as:

• Disputes over employment
• Statutory license protection
• Property damage
• Tax audits and appeals

7. Business property insurance

You should also consider the following types of coverage when choosing your business property insurance:

8. Builders Risk

A building during construction is insured under this coverage. The policy will cover the structural elements, materials, equipment and supplies used to complete the project. Insurance contractors or owners in Ontario may be responsible for insuring a project under construction as per the terms of the construction contracts.. In this case, it is also advisable to consider attaching liability coverage to your builder’s risk.

11. Equipment breakdown policy

Your business insurance does not cover you for the destruction of equipment caused by explosions or bursting of pressure vessels like hot water tanks, compressors, mechanical failures such as heating systems, motors, and electronic equipment such as telephones and photocopiers. In addition to the damage to the unit itself, the building, improvements and contents are excluded from coverage.

12. Cyber Liability Coverage (First and Third Party)

Today’s online world is convenient, accessible and fast. The result is also greater vulnerability to cyberattacks, such as viruses and breaches of personal data. Protecting your business from the financial consequences of cyberattacks can be made easier with Cyber Liability Coverage.

Small businesses are targeted by 43 percent of cyber attacks. While big corporations have the funds to bounce back, a small business probably does not.

There are many benefits to exploring cybersecurity insurance options. In the event of ransomware holding important files hostage, cybersecurity insurance can pay the ransom. Depending on your policy, you may be able to cover the cost of credit monitoring or legal fees if a hacker steals sensitive client information.

You should be mindful of what you’re covered for, as well as when your coverage kicks in. For example, you don’t want your insurance to provide coverage for social engineering fraud after an employee is tricked into giving access to your network.

13. Tool Floater

The items (including tools) at the insured location are covered by the property policy. “Tool Floaters” are designed to cover hand tools that are used on unscheduled job sites and in transit.

14. Business Auto Insurance

You will need Commercial Automobile Insurance if you use a vehicle for business purposes. More details can be found in our blog on protecting your commercial vehicle fleet.

A company’s premium is affected by the use of your vehicle. Always ensure your broker understands how the vehicle will be used and what territory it will be operating in to ensure your protection is adequate.

Your insurance company must be notified when you or any of your employees use a personal vehicle for business purposes. Vehicles with the appropriate commercial endorsement(s) will be rated accordingly.

16. Business interruption insurance

The costs of lost revenue and additional expenses associated with temporarily ceasing operations in the event of a fire or other incident can be covered by business interruption insurance, along with employee wages. An effective risk management plan can be useful during an unplanned event if you do not already have one.

17. Crime coverage

You can obtain crime coverage to protect yourself from things such as:

• Employee Dishonesty: This will protect your business from fraud and dishonesty committed by your employees, either alone or in collusion with others, excluding partners.
• Forgery of deposits: This type of insurance covers the risk of loss from the alteration or forgery of checks, drafts etc.
• Robbery and hold-up coverage: This provides protection against loss of money and securities within or outside of your business.
• Money Orders and Counterfeit Paper Currency: This coverage provides coverage for any loss resulting from currency that has been altered, counterfeit, forged or fabricated by third parties.

18. Umbrella insurance

A specific liability amount is included in every policy you purchase. In certain situations, the amount of liability coverage you have may not be sufficient to protect you completely. It is possible that umbrella insurance could provide the remaining coverage.

19. Co-insurance

A co-insurance clause involves both the policyholder and the insurer sharing the risk of an underinsured loss. In the event of a partial loss involving your property and contents, you will only be eligible for the percentage you have chosen (not the full amount).

Get the Right Coverage for Your Business

Every business requires a unique insurance policy. WB White offers customized insurance for a variety of industries.

WB White can help you protect your business by reviewing your insurance needs and providing a customized solution. If you are interested in exploring your commercial insurance options, then feel free to reach out to us at 1-877-727-0757 or via our contact us page.