Understanding the Different Types of Commercial Insurance Available

Understanding the Different Types of Commercial Insurance Available | Paibinsurance

Understanding the Different Types of Commercial Insurance Available

Mar 16 2023
PAIB Insurance

Commercial insurance is an essential aspect of risk management for businesses of all sizes. It provides financial protection against unforeseen events and liabilities that could have a significant impact on the financial health and stability of a company.

Commercial insurance policies are designed to protect businesses from a variety of risks, including property damage, liability claims, cyber-attacks, and natural disasters. There are many different types of insurance options available, each with its unique coverage and benefits.

In this article, we will discuss the most relevant types of commercial insurance and help business owners understand which policies are right for their specific needs.

Commercial Property Insurance

Commercial property insurance is designed to protect businesses against property damage, theft, and loss of income resulting from a covered event. Covered events may include fire, severe weather, vandalism, or other causes of damage to the insured property.

This type of insurance can also cover business interruption costs and expenses incurred during the repair or replacement of damaged property. Commercial property insurance is essential for business owners who own or lease physical property, such as buildings, equipment, and inventory.

Commercial Liability Insurance

Commercial liability insurance, also known as general liability insurance, can help pay for lawsuits and legal claims arising from a variety of liabilities like bodily injury or property damage.

This insurance can cover legal fees, medical expenses, and other costs associated with lawsuits and claims brought against the business. For any business that interacts with the public or that provides professional services, commercial liability insurance is necessary as it can help protect against financial loss resulting from legal claims following an accident.

Business Interruption Insurance

Business interruption insurance is designed to protect businesses from income loss resulting from a covered event, such as a natural disaster or other disruptive events that force the business to suspend operations. 

Business interruption insurance helps to cover ongoing expenses and losses during the period of interruption and may also cover expenses incurred in the process of resuming business operations.

Errors and Omissions Insurance

Errors and omissions insurance, also known as professional liability insurance, is a type of commercial insurance that protects against lawsuits and legal claims resulting from a professional’s errors, negligence, or failure to perform.

This can pay for legal fees, settlement costs, and damages awarded to the plaintiff in the event of a successful lawsuit. Errors and omissions insurance is particularly useful for businesses that provide professional services, such as lawyers, accountants, architects, and engineers.

Product Liability Insurance

Product liability insurance is a type of commercial insurance that should be considered by any business that manufactures or sells products. If your product causes damage or harm after it is sold, product liability insurance will cover the associated repairs, legal fees, and settlement costs.

Commercial Vehicle Insurance

In Ontario, businesses that use vehicles for commercial purposes are required by law to have commercial auto insurance. The minimum required insurance for all vehicles in Ontario includes:

  • Third-party liability coverage of at least $200,000
  • Statutory accident benefits coverage
  • Direct Compensation-Property Damage (DC-PD) coverage
  • Uninsured automobile coverage

You will likely want to expand your commercial auto coverage beyond the minimum required coverage by increasing coverage limits and adding useful optional coverages like collision and comprehensive insurance.

Workers’ Compensation 

The only other commercial insurance that might be required by law in Ontario is workers’ compensation. Many businesses are required to carry workers’ compensation insurance to provide benefits to any employees that are injured on the job.

Worker’s compensation can cover medical expenses, lost wages due to the injury, and rehabilitation costs for employees in need. Businesses that fail to purchase workers’ compensation can face penalties and legal action.

Cyber Insurance

Cyber insurance covers losses and damages resulting from cyber attacks or data breaches. In today’s digital age, cyber insurance is an increasingly important coverage to consider adding to your policy. 

Cyber insurance can help pay for expenses associated with data recovery, business interruption, legal fees, and other expenses resulting from a cyber incident. It can also provide financial protection against liability claims and regulatory fines.

Business Overhead Insurance

For small business owners, business overhead insurance can be a lifesaver. If you are unable to work due to illness or injury, this insurance will cover the expenses necessary to keep the business afloat until you can return to work. Things like rent, utilities, and employee wages are all included in business overhead coverage.

Directors’ and Officers’ Liability Insurance

This is sort of like errors and omissions insurance for the actions of business directors. Directors’ and officers’ liability insurance protects the personal assets of company directors and officers against claims alleging wrongful acts committed in their capacity as a director or officers.

Director’s and officers’ liability insurance can help attract and retain talented individuals in executive positions, while also mitigating risks associated with their decision-making.

Umbrella Insurance

Umbrella insurance is a type of liability insurance that provides additional coverage beyond the limits of a company’s primary liability insurance policies.

This insurance can cover legal fees, settlements, and judgments that exceed the coverage limits of the primary policy. Umbrella insurance provides an added layer of protection against potentially catastrophic claims and can be essential for businesses that want to protect themselves against significant financial losses due to legal action.

How PAIB Can Help You Find the Best Commercial Insurance

With so many insurance options available, an experienced insurance broker can be invaluable in helping you find a policy that fits the unique needs of your business. PAIB Insurance can help you make an informed decision about which coverages you actually need. With headquarters in Timmins and a coverage area that includes the majority of the province, PAIB understands the specific needs of Ontario businesses.

Don’t pay for coverage that doesn’t actually serve you, and don’t neglect coverage that could potentially save your business from bankruptcy. Contact us today to speak with an experienced broker to better understand your options, and compare multiple policies. 

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