Business insurance covers the property owned by a company, its inventory, materials, equipment, and tangible and intangible valuables within the business establishment. Business insurance also includes liability coverage, which protects the company and its employees from many different types of lawsuits. There are various business insurance policies on the market, each with specific coverage options catering to unique business needs.
Any entrepreneur understands that it is essential for companies to have some form of business insurance coverage, while at the same time, some specific coverage is often legally required depending on the nature of your business. The problem is that many business owners are unsure of what business insurance they need, what it specifically covers and how much it all costs. Below is a brief breakdown on price by type of business insurance.
General Liability Insurance
More on General Liability Insurance
Product Liability Insurance
More on Product Liability Insurance
Professional Liability Insurance / Errors & Omissions Insurance
Workers Compensation Insurance (Legally Required in Ontario)
Aside from the most common types of business insurance, there are also many different industry specific insurance policies, and many uniquely crafted insurance plans that meet all levels of a company’s business insurance needs. Regardless, some level of protection is needed no matter what size of company you own. The thing about business insurance is that there is no real average cost as a whole, but average rates within each industry. Premiums are based on the amount of coverage received, the inherent risk associated with the business, and number of employees within the company. Once all factors are taken into consideration, a premium is calculated and charged on a yearly basis.
Overall, a small business could pay as little as $500/year for business insurance while a large company with many employees, products, materials, vehicles and other assets to insure could pay thousands of dollars in business insurance each year. In addition, certain types of businesses may also need professional insurance policies.
As a business owner you have to take all aspects of your organization into consideration and understand what you need to insure, and what policies are best for your industry. Ideally, a company should be insured in all relevant areas of their business in order to protect themselves from extremely costly lawsuits and financial damages.