Insuring Your Small Business Against Common Risks

Insuring Your Small Business Against Common Risks

Posted by on Jan 15, 2021 in Insurance Advice

Life is filled with dangers. These can be minor things, like water damage and small losses, or larger things like severe injuries and property-destroying fire. If you’re a small business owner, these risks get magnified ten-fold as business shortcomings can lead to massive debt and even bankruptcy. This is why you must get the best small business insurance available in Ottawa. Below, you’ll see the most common risks and consequences that insurance can help mitigate.

Business Interruption

The most common consequence of disruptions like storms or fires in a business is a halt in your company’s operations and services. Consider whether you have a plan for your enterprise if a tree collapses on a roof or the pipes burst. The critical question is whether your business will be able to survive an interruption. Will you have the money to keep the metaphorical lights on when the literal lights are out? If the answer is no, then insurance can help. Business interruption insurance can be added to existing property insurance policies and can help cover lost income, operation expenses, and even relocation fees if something happens to your primary location.

Fire and Water

While different companies have wildly varying problems and insurance needs, a standard risk that applies to all industries is the possibility of fire or water damage. Water leakages, plumbing issues, and floods are some of the potential catalysts for severe damage, either to your storefront, the products you sell, or the equipment you rely on. Similarly, a big fire can destroy your whole business in an instant. More importantly, you are unlikely to be able to — or want to — afford to replace an entire location. That’s why it’s vital to have a small business insurance policy that can compensate you and pay for the necessary repairs and replacements. You should cover your buildings and vehicles for this and other kinds of general damage as an absolute bare minimum.

Theft and Equipment Damage

Theft is another major risk. If you run a store that sells products, having your entire stock taken can be disastrous. You may not be able to deliver on the promises you made to your customers, whether they’re suppliers, the general public, or creditors. Even if that’s not an issue, you’ll have to fork over a lot of cash to cover replacing all your product. This, like the other problems on this list, can be entirely avoided with the right insurance coverage. In a similar vein, damage to the equipment you use to run your business could result in costly repairs and a halt in production, which leads to even more significant losses. Combining a policy that covers this equipment damage with one that compensates for interrupted operations can help reduce the pain and inconvenience.

Legal Liability

Legal liability insurance is vital. Customers and visitors can easily decide to sue if they feel that your company is somehow responsible for damage or an injury, for example, if they slipped and fell while on your premises. There is no full-proof method for preventing this sort of liability, which is why you shouldn’t ignore Commercial General Liability. Getting this will provide you with compensation for any damages that your organization is found legally responsible for; generally, this refers to third parties’ property or bodily harm. Remember, even if your staff and you are off-site, someone can still sue you. Another area of liability insurance that may be relevant to you if you have executives is directors’ and officers’ insurance policies. This type of coverage will protect senior management and board members from suits filed due to their decisions and any resultant impacts. If you’re a new business owner, you may not have the expertise to peruse each aspect of the contracts you sign properly. This lack of understanding can result in unintended violations or other problems. Legal expense insurance can save you thousands if someone brings legal action against your business even outside of the third-party liability suits.

Cyber Security

Despite being great for many businesses, the internet comes with its own set of risks. Primarily this is in the form of hackers and other malcontents who may try to steal your data. While the largest companies will typically have excellent digital defences, smaller businesses often don’t have the cash flow for adequate security, making them a prime target for cybercriminals. Getting some form of cyber insurance is a great, cheaper alternative to springing for high-end protection measures. If your data, like credit card information, is stolen, you can get compensated and avoid costly digital theft.

Higher-Risk Industries

While most of these suggestions thus far have been aimed at a broad range of industries, specific spaces are more prone to risks. If you’re in one of these more dangerous areas, you may need more insurance protection, affecting the premiums you pay. For instance, restaurants are more likely to have equipment issues and fires because of the work’s nature. A factory that uses high-end manufacturing equipment could run into larger financial costs due to a breakdown, necessitating more generous compensation and faster response times. Even an individual plumber might need some sort of liability coverage to make up for the water damage they can cause. Make sure to share pertinent industry information with your insurance provider so you can get the policy you need, even if it’s a bit more expensive.

Protect Your Small Business with Insurance

With so many risks out there, from theft to property damage to legal liability, it makes sense to get a robust insurance policy. Save yourself a headache in the future and protect the future of your business now. For more information about insuring your Ottawa small business against common risks, call Oegema Nicholson at 613-519-0230 or contact us here.

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