Business Insurance Ontario (2020): Plain English Insurance Guide for Ontario Business Owners

Business Insurance Ontario
Business Insurance Ontario

Business owners have a lot of things that they have to think through and deal with every day, including keeping up with customer requests, inventory, security, and employee matters.

The one thing that all of these issues have in common is that they need protection. A business insurance policy is just the thing that can provide the protection to keep your business going.

In order to have the best protection for your business, there are some things that you will want to know about insurance, and we cover it all in this complete overview of business insurance in Ontario.

What is Business Insurance?


Small business insurance is a product that is also known as a commercial business policy. It provides the protection to keep your business from bankruptcy if there is a major loss that happens to you and the business.

This kind of policy can have different parts to it that can be added to fully protect you from damages. Without business insurance you could lose everything. All it would take is one major disaster and everything that you have worked hard at building would be gone. 

Why is Business Insurance Important?

Owning a business is a major undertaking. The last thing that you want to have happen is for there to be a loss that is too much to handle. There are several risks that can come up suddenly. Knowing these risks can help you be better prepared:

  • The biggest risk to your business is the risk of being sued. This risk alone could cause your business to fail. All it takes is for a customer to get hurt on the premise or an employee to get angry and the next thing you have is a major lawsuit to deal with.
  • Natural disasters are a major threat. All it would take is for a fire, vandalism or a strong storm to destroy your business and you could be facing a major financial loss. Business insurance takes care of the cost to rebuilding everything.
  • Business insurance also protects against employee injury. There are a few different options for this protection, but it all pays to protect your employees.
  • Business insurance covers you if there is an unintentional absence from the business. A major health issue can keep you from working. This can add up to a major loss if you are gone for too long.
  • Business insurance can also help you land the next client. If you company services other people, then they will want to know that you have insurance to cover your damages.
  • The uncertainty of the future is a great reason to have a commercial business policy. This allows you to be prepared for the future.

What Insurance Does a Business in Ontario Need? 

Business liability insurance is required in Ontario if a business is planning on operating from the area. Liability insurance is at the core of every insurance policy. This one coverage protects your company from human error and lawsuits. For an auto policy the minimum amount of liability insurance is $200,000. But for a company it will depend on your exposures. You will want to have a policy with enough coverage to protect in the event of a major lawsuit. Most policies start with $1,000,000 in coverage.

7 Common Types of Business Insurance Policies


Some of the most common types of insurance available to Ontario small businesses include:

Liability insurance is a policy that protects from injury lawsuits. This can happen at any time if a person falls while in your shop. The fall would have to be related to something an employee left out or an object left in a walkway. It could also be the result of a water spill that was never cleaned up. This kind of policy is required by law and is fairly cheap to buy. The cost starts at $350 and can be as high as $4,000 per year based on annual revenue.

Errors and omissions policy. This kind of policy is strongly recommended if you or anyone is involved as a consultant or gives professional advice or recommendations. This type of police protects the named insured from any mistakes that they may have made. If the other person receiving the information suffers a major loss or any other harm as a result of the advice you provide them, they have an option to sue you for damages. The cost for such a policy depends of the amount of coverage and risk exposure you may have.

Landlord policy. This type of commercial insurance is industry specific. This means that your company will have to be in the business of renting homes to tenants. It is recommended that you have this policy if you deal with real estate as a commercial landlord company. This policy can be as much as a normal home insurance policy but covers mainly the structure and outbuildings of the property. It has a starting rate of $400, buts increases as needed based on your risk exposure and coverage needs.

Commercial auto insurance. If you have a fleet as part of your business, then you will want to have this kind of policy. This policy will pay for any damages that are accident related. You will need to have each driver listed on the policy for there to be coverage for them and the vehicle. This policy is not cheap to have on the insurance policy but is required by law if you operate a fleet in Ontario.

Worker’s compensation insurance. This policy is required by law. It is based the level of salary that you pay each month to your employees. This policy will pay their wages for you if they are ever injured while working on the job.

Inventory or content insurance. This type of policy is highly important if your store has an inventory. If there is ever a major loss or items or destroyed, the policy will pay to replace the inventory and fix any structural damages.

Home based business insurance. This type of policy acts like a regular commercial policy, except it is for home-based businesses. It is an option for homeowners that work out of their homes. It protects all the business exposures and any area where your normal home policy would decline coverage.

Travel insurance. If you are a person who travels for your business, then this policy is for you. It protects different aspects of the trip and covers your belongings while you are traveling. It is inexpensive to buy and usually lasts for the duration of your trip.

Business Insurance Quotes for Ontario Businesses

Once you have determined what kind of business insurance policy you need it is time to get a quote from your risk exposures. Some policies can be quoted online such as travel insurance and most basic auto policies. But others will require for you to speak with a live agent because they will need certain different pieces of information about your company.

In order for you to save time and money getting an insurance quote here are some things that you will want to have and know about what drives the cost of insurance.

Information Needed for the Business Insurance Quote

There are a number of documents that you will need to have before getting a completed quote for your business.

  • Inventory sheets
  • Vehicle identification numbers
  • Driver license numbers of all your employees
  • Square footage of buildings
  • Salary sheets for each employee

These are some of the documents that you will need to bring with you to the agent’s office. There might be other pieces of information that they may need to finalize the quote.

How to Keep the Cost Down on Business Insurance

On some level you have control over the price of your insurance policy. The key to an affordable policy is to know what kind of discounts available and what level of coverage you will need.

  • Bundle your policies with the same company to receive a 10 to 20 percent multi-policy discount.
  • Only ask for the level of coverage that you really need. Just because a higher amount is available does not always mean you need to have it on the policy.
  • Ask for a future date discount. Sometimes a company will give a discount for a policy that can be postdated at least two weeks into the future.
  • Avoid any add-ons that you do not need. If you are looking for a commercial auto policy, then decline any coverage that would not enhance this kind of policy.
  • Ask for discounts that may apply to your situation. Some companies may provide a military discount or even other unique discount  options. 

Tips for Finding the Best Business Insurance Agent


Getting the right policy for your company depends on the quality of agent that helps you. This means that you will need to know how to find the right agent to represent you in your insurance needs.

  • Check reviews about the company that you are wanting to hire as your insurance provider. Independent review companies are great sources of information about the company. The higher a company is rated, the better products and service they will be able to provide.
  • Ask for referrals. Check with other business owners to see which company they use for their insurance needs. If you find that there is common company that most people use, then it is worth checking them out.
  • Check consumer reports and service outlets. These sources provide detailed information about insurance companies and the kind of services they provide. Sometimes there will be a performance rating with the description to help you determine if they are worth your time dealing with.

Buying Business Insurance in Ontario – Costly Mistakes to Avoid

There is a tendency to purchase products that are not needed for your risk exposure. In order to keep from making serious mistakes and suffering a loss as a result, there are some things that you can do to avoid this pitfall.

  • Understand exactly what types of coverage you need and avoid coverage types that you do not need.
  • Get two or more quotes from different companies to check rates and to make sure you are getting the best rate on the market. Some companies have higher rates because they have a lot of losses that they are trying to recover from.
  • Think twice before signing up for the policy with the cheapest rate. Look at the company’s customer service rating and the way they handle claims. Sometimes the cheapest rate means they have the cheapest service!
  • Watch the expiration dates of any current policies. If you are switching policies, make sure to have the start date before the other policy is canceled or expires. This creates a gap in coverage and can affect your rate on the new policy

There are a lot of things to know and consider when buying a new commercial business policy in Ontario. By having a basic understanding of each policy type and what you can do to keep the cost under control, you can have a policy that is perfect for your business needs!


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