Liability insurance is the other kind of insurance no business should be without; its purpose is to protect your business from being sued.
General liability insurance protects your business from liability arising from negligence that may cause injury to others, such as a customer or employee. It also protects your company if someone is injured as a result of using your product or service. When you consider that the legal expenses and settlement or judgment expenses of a single lawsuit could drive your business into bankruptcy, you'll see why this kind of insurance is considered a "must-have".
If you sell manufactured or assembled goods, check and see whether or not your general liability insurance policy also covers product liability. If not, you'll want to add this type of specific liability insurance to your package.
If you're a professional, such as a doctor, lawyer, architect, computer consultant, or realtor, you should also consider carrying professional liability insurance. Types of professional liability insurance range from malpractice insurance for those in the healing professions, through error and omissions insurance for business professionals. If in doubt about what kind of professional liability insurance you should be carrying, consult your provincial professional organization. In some provinces, professional liability insurance is mandatory for certain types of professionals.
If you have employees, workers' compensation insurance is also mandatory in Canada. (See my Workers' Compensation Insurance library for details about this kind of insurance and links to the registration information and forms of each provincial Workers' Compensation Board.) You should also seriously consider providing employee insurance, even if you're running a small business.
It's tempting to just ignore employee insurance, but you know that good employees are the key to the success of your business operation, and providing employee benefits such as medial, dental, and disability benefits, will not only help keep your employees healthy, but will help keep them contented and willing to continue working for you. Think about how much money and time you'd spend finding and training new employees, and keeping the good employees you already have makes dollars and sense.
Many financial institutions, such as the Royal Bank, offer special Employee Benefit Plans For Small Business. This employee benefit plan, especially designed for small businesses with 1 to 49 employees, offers good flexibility, as you can select the benefits you want to provide.
Other types of business insurance that small businesses should consider buying are business interruption insurance, business disability insurance, and key person insurance. Continue on to the next page to learn about these types of business insurance.
