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Small Business Insurance and Why You Need It

Written by Nerissa

Small businesses make up over 90 per cent of all the businesses in Alberta! You can say that Alberta is built by entrepreneurs that put their time, energy and resources into the provincial economy. It’s not easy to build a business from an idea to a self-supporting career, and that is why small business owners protect their hard work with insurance.

What is small business insurance?

Small business insurance is any type of policy that mitigates the risks of your company. Not every company will need every type of insurance. For example, if you do not have company vehicles, fleet insurance is not required. However, most businesses, whether they are run from home or from a storefront, should consider property and liability insurance.

Larger small businesses, particularly those that are partnerships and corporations, should also look into insurance that helps them stay operational if one partner or major shareholder passes away, or becomes disabled.

Small Business Insurance 101

Some of the more common types of small business insurance on the market include, but are not limited to :

•  Life insurance

o  This is very important for sole proprietorships as this protects the family of the entrepreneur. Riders can be added to protect against disability or critical illness – remember, entrepreneurs don’t get these protections from their employer; they are the employer and must protect themselves.

•  Liability insurance

o  If your product accidentally harms someone and you get sued (a child chokes on a product part, a structure collapses, your consulting advice causes harm) liability insurance protects your personal, financial and professional assets. It also provides funds to engage in legal action.

•  Business interruption insurance

o  Could your small business survive if a fire destroyed part of your property or merchandise? What if the main shareholder was in an accident? Cash to keep the company going could be the difference between carrying on or going under.

•  Key person insurance

o  The key person is not always the main shareholder. It could be a high-earning salesperson or someone whose technical expertise is vital to the company’s survival. That person would need to be replaced if they pass away or become ill or disabled. It takes money to find, train and recruit someone of this caliber while also staying afloat when your profit is impacted.

•  Buy/Sell insurance

o  This policy works in conjunction with a buy/sell agreement, which is a document that outlines how the sale or transfer of shares will take place if a main shareholder passes away or becomes critically ill or disabled. Funds are needed to purchase the shares, and insurance is often used for that purpose.

•  Fleet insurance

o  Vehicle insurance is mandatory for company vehicles, even if your staff are using their own vehicles on your company’s behalf. Contact your broker or agent to ensure you have the right fleet insurance, otherwise stiff penalties, fines or legal action could result.

Don’t Neglect the Importance of Small Business Insurance

Small business insurance is not just another expense small businesses face. It is a critical part of your financials. Small business insurance means reassurance and protection.

To learn more about small business insurance, or how to get affordable group benefits for your small business team, contact me today.

About Reassured

We work with individuals across Alberta to secure the best life insurance rates.

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