Benefits of Business Insurance in Ontario
We'll show you what to expect when it comes to the average cost of business insurance in Ontario, no matter how long your business has been around or how new of an owner you are.
If you'd rather hear it from one of our experienced Ontario insurance agents, the KBD team specializes in business insurance for both new and old companies.
What does business insurance mean?
Commercial insurance, also called business insurance, is like having a safety net for companies in Ontario.
Businesses can get money from commercial insurance if someone files a claim against them or if their property is destroyed or stolen.
It is a group of different insurance products, and each client's coverage is made to fit their wants and business model. A business in Ontario must be registered in the state in order to get commercial insurance.
Incorporating your business is also suggested so that you are not personally responsible for the business's debts.
So, if you ever get sued (prayers for that!), the people who sue will go after your business instead of your money.
What is the cost of business insurance in Ontario?
To give you an idea, the average Ontario business pays between $500 and $5,000 a year for business insurance.
That number really means the average cost of business insurance in Ontario and across Canada. company insurance can cost hundreds of thousands or even millions of dollars a year, depending on the type of company.
There is such a wide range because your insurance premium is based on many things. This includes how much money you make a year, how many claims you've had, where you're located, and what business you're in.
But annual revenue is the most important thing that affects how much business insurance costs.
In general, the cost goes up with the size of the business. Besides that, risk is a big part of insurance costs; businesses with more risk will have to pay more for coverage.
This list shows how much business insurance usually costs based on how much money the company makes a year, so you can figure out what range your company is in and how much to budget for:
And here’s a quick overview of how risk affects the insurance premiums of different kinds of businesses:
How risk affects your business insurance premium
It's clear that bigger businesses with more assets, income, and risk factors are likely to have higher rates.
That being said, you'll need to get insurance for some amount of risk no matter what kind of business you run.
Finally, the price of commercial insurance in Ontario is based on how much coverage you need based on your business model and the general risk factors of your industry.
How do you figure out the prices for commercial insurance?
In many fields, insurance companies figure out how much liability insurance costs by increasing the amount of money your business makes each year by a rate per $1,000.
That is, the insurance company will charge a fee for every $1,000 that a business makes. In this case, a pet shop will pay about 17 cents in insurance for every $1,000 it makes.
For every $1,000 that a business makes, it may have to pay about $3 in insurance. This is the main reason why rates vary so much.
If you're a new business and aren't sure how much money you'll make, you can just give an estimate. Of course, this calculation can be done in different ways based on the type of business you run.
What kinds of protection do businesses in Ontario have to have?
In Ontario, business insurance isn't required by law, but it is strongly suggested that you get it. The only time this isn't true is if you use your cars for business.
Business auto insurance is needed by law, just like personal auto insurance. Any workers who use the car must be listed as drivers.
How much does business car insurance cost in Ontario?
Commercial auto insurance can range anywhere from $100 to $300 or more monthly, based on your business needs.
In Ontario, all drivers must have $200,000 in liability insurance, including commercial auto insurance. Your business providers may also need you to have business insurance in order to do business with you.
So, if you rent an office space for your consulting business, the owner will make you get commercial liability insurance as part of the lease.
A company like KBD can look at the assets, liabilities, and risks of your business to figure out how much commercial insurance will cost and get you the best coverage at the lowest price.
Next, we'll talk about the different kinds of business insurance. This way, you'll know what to ask your insurance broker or insurance company when you meet with them.
What kind of protection do I need for my Ontario business?
Ontario businesses should get industrial general liability insurance at the very least. This coverage will cover their costs if they get sued and will normally cost them $740 to $1500 a year.
Businesses in Ontario and Quebec can get commercial general liability insurance in the following areas:
Property damage liability protects you if your goods or an employee damages someone else's property.
Product responsibility protects you if your goods or services hurt someone else.
Body injury: This type of insurance protects you if your service or product hurts someone.
As you look for the right policy for your business, you should also consider other security types.
The following are some types of insurance that are suggested:
To sum up, Ontario companies should have these three types of insurance on their commercial insurance policy:
Liability coverage: This keeps you from getting charged by someone else. This type of insurance covers the loss of physical goods like computers, desks, chairs, stock, buildings, and more.
Interruptions in business: Pays for fixed costs, lost earnings, and administrative costs like payroll if your business has to close.
What are the four most popular types of business insurance? Does the type of business insurance change the price?
You may want to add more types of coverage to your policy depending on the type of business you run. These four types of coverage are an excellent place to start.
These are the four most popular types of business insurance:
Commercial general liability insurance includes claims for injuries to people or damage to their property, as well as claims related to advertising.
Business property insurance protects things like buildings, furniture, and other physical items.
When you have commercial auto insurance, you're covered for injuries, liability, and new cars in case of a crash.
Business interruption insurance pays for your business's working costs and lost income while it's not running.
The price you pay will depend on how much business insurance coverage you get.
Here is a list of extra coverages that you can add to your insurance.
Professional liability insurance protects professionals in case someone claims they were careless or that their service caused them to lose money.
Cyber insurance protects businesses from being sued if their data is stolen.
Employees can avoid losing personal money if claims are made against them with director's and officer's insurance.
Crime insurance protects businesses from losses caused by theft.
How to get better deals on business insurance
There are different kinds of insurance plans, and not all brokers and insurance companies can help you find the best one for your business.
Here are some essential tips that can help business people save money on their Ontario business insurance.
Get a broker who knows your business and the industry you're in.
It's important to work with a dealer who knows your business inside and out. They will already know the risks and benefits of your industry and business plan, which will save you time getting them up to speed. They'll be able to give you good help on the policies that will work best for you because of this.
Look at different insurance companies' benefit plans side by side.
One good thing about working with an insurance broker is that they can look for you deals on business insurance. They know which insurance companies work best with different types of businesses because they work with a lot of them.
Don't buy too little or too much insurance.
Obviously, the easiest way to save money on your insurance is to not buy more than you need. If you buy too little, on the other hand, and your policy doesn't cover you, you may have to pay huge amounts of money out of your own pocket. That's why it's so important to have a service plan that fits your needs.
Don't be afraid to ask things.
You pay your dealer a fee to handle your account when you buy business insurance. Don't be afraid to ask them about the price of your policy; you hired them for their knowledge. Brokers can also let you know if there's a way to save money by switching to a different coverage plan. This is because business premiums change all the time.
Check to see if you can save money by combining insurance.
When you buy more than one policy from the same company, you often get a discount. If you're working with an insurance company, you can ask them if this is possible. They can also do the research and find the best rates and bundle choices for you.
How do broker fees work in Ontario when it comes to business insurance?
The insurance company pays them a commission when insurance brokers sell a product. The client does not pay for these fees.
On the other hand, the client has to pay what the insurance agency wants for broker fees.
Don't be afraid to ask your broker how your business insurance policy fees are broken down.
In conclusion, You buy peace of mind when you buy business insurance.
Any disaster—fire, flood, theft, or even Bigfoot—can happen to your business. If you have the right insurance, you won't have to pay anything to get it back up and running (and making money).
That's the reason why big businesses spend so much on insurance. So, getting commercial insurance is a good idea, even if you're just starting out as a business owner.
Getting insurance that fits your business's needs is essential so that you only pay for what it needs.