How Much is Business Insurance?

The Cost of Business Insurance in Ontario

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 of these common questions.

Most Common Types of Business Insurance:

General Liability Insurance

  • Protects business from various liabilities that arise from negligence inside and outside of a business’s facilities involving both the public and employees
  • COST: $500 – $15,000+/year

More on General Liability Insurance
Product Liability Insurance

  • Protects the business from legal action regarding a product developed by the company.
  • Relevant for manufacturing and consumer goods industries
  • COST: Varies

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Professional Liability Insurance / Errors & Omissions Insurance

  • Essential for doctors, lawyers, architects, consultants & realtors to protect against legal action regarding professional work provided
  • Many professional liability insurance policies are a required level of business insurance coverage according to union regulations and provincial/federal law
  • COST: $500 – $2,500+/year 

More on Professional Liability Insurance and E & O
Workers Compensation Insurance (Legally Required in Ontario)

  • As of January 1st, 2013 it is mandatory in Ontario that all independent operators, sole proprietors, partners, and executive officers of construction businesses carry WSIB insurance coverage for their employees.
  • COST: See WSIB Premium Calculator

Industry Specific Policies

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.

Protect Your Business

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.

Contact Mitchell & Whale today to discuss the many business insurance options and policies available, and receive a no obligation quote!

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