How Much Does Business Insurance Cost?

As a business owner in Ontario, you probably already understand the great importance of business insurance. You probably also know that there are tons of different providers along with different types of coverage. What you might not know is that there are companies like Aviva that offer insurance that covers a company’s property, inventory, materials, equipment, as well as intangible and tangible goods. In addition to this, business insurance can protect a company and its employees from a variety of different types of lawsuits.



Choosing The Right Insurance Policies For Your Business

Depending on the type of company that you are running in Ontario, some insurance policies might be essential to your business, while others really won’t apply to you. For instance, if you are\ running an online business from home, there is really no need to worry about covering your property with business insurance, because it will probably be covered under your homeowner’s insurance. With that being said, you should be aware of the fact that every insurance company is different when it comes to pricing. Some companies will offer more coverage than others, but charge more in the long run. Some providers might offer less coverage and charge more than a company that offers more coverage.

This is why it is imperative to weigh which policies are the most important to your business, and which provider can offer you the best rates. Of course, the best rates do not always mean that you are getting the best coverage. Make sure you are putting in the research to completely evaluate what each insurance provider has to offer.



Understanding The Most Common Types Of Business Insurance

As mentioned above there are a variety of different types of business insurance policies available, and understanding what each one has to offer is imperative to choosing the right package for your company. Below, you will discover some of the most common types of policies available to businesses. The information below will help you determine which coverage options are essential for your business.


General Liability Insurance

General liability insurance is a necessity for any business that has a brick and mortar store, because it protects your business from a variety of different liabilities that could occur inside or outside of the store. For instance, if a package falls off a shelf and causes bodily harm to a customer or employee this type of coverage can protect your business assets in the event of a lawsuit. General liability insurance is truly a necessity for any Ontario business! It will keep your business afloat during your most try times.


Product Liability Insurance

If you are offering products to the public, product liability insurance is something that you cannot go without. It protects your company against any legal actions that might arise with the products you put on the market. For instance, if you are promoting a clothing line that causes a customer to break out with a terrible rash, it is likely that the customer will try to bring legal action against you. Product liability insurance can protect you and your business in a situation like this.


Errors And Omissions Insurance or Professional Liability Insurance

Regardless of how thorough you are in your profession or how much time you take to do something, there are times when you will make a mistake. Unfortunately, there is no way to avoid this and this is where errors and omissions insurance can come in handy. If you or one of your employees make a mistake that results in a financial loss to the customer, errors and omissions insurance can protect you. This type of insurance is an absolute must for lawyers, doctors, realtors, architects, and consultants.


Workers Compensation Insurance

This is a type of insurance that protects your employees. For instance, if one of your employees gets injured on the job, this type of coverage will pay your employee’s wage and medical bills. As a business owner, you should know that as of January 1st, 2013 the Ontario government made it a law for any independent operator to carry this type of insurance for their employees. So, if you are going to operate a business with employees, you will have to carry this insurance for them. 



The Benefits Outweigh The Costs

Many business owners are worried about overspending. This is a common concern, but it is something that must be ignored. Remember that some expenses are necessities and should not be avoided. This is definitely true when it comes to business insurance. For the sake of yourself, your family and your employees, it is absolutely pertinent to go above and beyond to keep your business above water. This is why commercial insurance is so important. Business insurance is capable of protecting your business from various problems.

If you want to limit the risks associated with theft, property damage, and potential lawsuits, you definitely want to invest in commercial insurance. Operating a business without a sufficient amount of commercial insurance is incredibly risky! You could run into a devastating problem that could force you into a premature bankruptcy. With all of this in mind, you should realize that the benefits associated with commercial insurance greatly outweigh the costs.



No Universal Price

Business owners will always be interested in knowing how much they’re going to spend for business insurance. As mentioned above, it is vital to realize that there are numerous insurance providers. Intact Insurance, Premier Marine, and Llyods of London tend to be some of the most popular in Ontario, Canada. The prices can vary widely from one insurance provider to the next. Of course, this isn’t the only factor that can alter the price.

Your business history, the duration of your business, and your own personal credit score could all impact the price to some degree. The insurance company will always want to make sure that they’re taking a limited risk. Therefore, they’ll evaluate each of their potential clients thoroughly. Then, they’ll provide the client with a premium, which reflects the client’s risk level. If you’re deemed to be a riskier client, you’ll likely be required to pay a higher premium and vice versa.

You can also adjust the coverage to alter the price. If you feel that it is not important to have crime or property coverage, you can eliminate them and decrease the price to some degree. Now, you should realize that there is no universal price. You will not receive the same price quote as another business owner in your neighborhood.



Is The Cost Of Commercial Insurance Really Worth It?

Many business owners will go through the quote process and then quit. They’ll find out that they’ll be required to pay a hefty premium and this will convince them that the price simply isn’t worth it. This couldn’t be further from the truth. In actuality, the price is going to be expensive, but the insurance will pay off dividends in the long run. As a business owner, it is your responsible to protect your employees and your family. If your business is forced to close its doors, each of these people will be impacted!

If you want to provide your workers and your family with a bright future, you will definitely want to acquire a sufficient amount of insurance.



Factors That Will Impact The Premiums

As you probably know there are many factors that will impact your auto insurance premiums. Well, the same thing goes for business insurance. To learn about these factors, you should visit Premier Marine or Aviva’s official websites. Below, you will find a list of factors that will have a negative impact on your business insurance premiums.



reasons behind cost of business insurance



Business History

Many people are not aware of the fact that their work history can have an impact on the cost of their business insurance. For instance, if you have failed to fulfill contracts in the past this could come back to hurt you, when you try to obtain insurance coverage. Insurers perform an extensive business background check on all applicants applying for coverage to keep their risk to a minimum.

Do not be surprised when the insurer requests to see your previous contracts. Be prepared, by gathering this information prior to submitting your application. This will show the insurer that you have nothing to hide. 


Services Offered To Consumers

The type of service you offer to consumers can also impact your business insurance premiums. To keep the risks to a minimum, insurance companies always take the type of service you perform into consideration. Companies that employee arborists, electricians, stunt professionals, lineman, firefighters, security guards and bodyguards are all classified as dangerous jobs. If you employee these types of workers, you should expect to see a higher premium, which does not seem fair, but insurers are not going to take these risks lightly.

Businesses that employ clerks, phone operators, computer analysts and bookkeepers are always offered lower premiums. The reason is because these jobs are not considered dangerous.


Claims History

In the modern world, it is extremely difficult to fully satisfy every customer or client you serve. Frivolous and genuine business insurance claims can be very damaging for any type of business and they can linger around for many years. One of the first things an insurer will request from applicants seeking business insurance is a background check, including their claims history. If you have open claims against your company, you can still get approved for business insurance, but you should expect to be offered a very high premium.

It is possible to settle the claim, before it turns into a lawsuit to avoid further damage. Companies are always going to be at a high risk for lawsuits and claims. However, if you are willing to work with the customer, it may be possible to avoid claims all together. By not dealing with these allegations, you are only putting your business at risk, while raising the price of your insurance premiums.


The Number Of Employees You Have

There are a lot of advantages and disadvantages to employing multiple workers. Of course, with more workers you will be able to get more work done and turn more of a profit in a shorter amount of time. However, this means that you are going to have to ensure that each worker is covered with a variety of different types of insurance. The more people you have working for you, the higher your premium is going to be.


The Amount Of Money That You Are Brining In

Every company wants to make loads and loads of money, but you should know that bringing in more money is going to greatly increase your insurance premiums. As more and more money is coming in it means that there is a much higher risk for a lawsuit, because you will be dealing with a more customers.


The Types Of Contracts That You Have Signed

When it comes to purchasing error and omission insurance your contracts and work history can greatly affect the cost of your coverage if you purchase the prior acts coverage. For instance, if you have previous contracts with 30 different customers your premium is going to be much higher than if you only have contracts with 10 different customers. Your provider will probably ask for a list of your previous work history and contracts.


Deciding The Cost Of Your Deductible

An insurance deductible is the cost of money that you have to pay out of pocket before your insurance coverage actually kicks in. When you have a higher deductible, it means that your policy payment will be lower. However, a lower deductible means that your policy payment will be higher. To most business owners it almost seems desirable to go with a higher deductible, because it allows them to reduce the cost of their policy, but this can be a major mistake if you have a high potential for risk. In the event that an accident does occur it means that you are going to be required to pay a lot more money out of pocket.

Be sure you thoroughly weigh your options and risk factors before deciding on what kind of deductible you want to go with.


The Location Of Your Business

You might not even be aware of the fact that the location of your store can affect just how much your insurance coverage will cost. For instance, if you are located in a flood zone or an area where tornados and hurricanes are common your business is going to have to pay greater out of pocket costs for coverage. In some situations, it might even be worth the extra splurge to just move your business to another location to avoid these hazards altogether.



Other frequently asked questions about business insurance