The Rules Around Business Insurance

Canada has relatively strict rules pertaining to business insurance. Here is a very quick guide to some of the necessary kinds of insurance that businesses operating in Canada need to purchase.

Workers Compensation

Canadian companies need to be insured to cover injuries and damages caused to workers. Workers can seek compensation for injuries caused by lax safety standards or poor working conditions, and it is essential that businesses are covered in order to pay compensation. This not only enables workers to seek the compensation that they deserve but incentivizes businesses to improve working standards in order to cut down on insurance costs.

Commercial General Liability

Companies like kbdinsurance offer commercial general liability insurance to businesses, which is a legal necessity. The legal necessity of commercial general liability insurance is designed to ensure that companies offer safe services and products or has coverage to pay for any damages or injuries caused by their products or services. Commercial general liability insurance typically covers three areas:

Property Damage

This coverage is needed to cover the eventuality that a service or product provided by a company causes cost inducing damage to property.

Bodily Injury

Bodily injury insurance covers injuries caused by services or products provided by a company. When a consumer sues a company to cover medical costs incurred by the use of their product, this is usually the coverage that comes into play.

Product Liability

This coverage ensures that any other kind of cost inducing damage caused by a product can be paid for by a company.

Automobile Liability

Many businesses maintain fleets of vehicles that are essential to their operations. Vehicles must be insured according to Canadian law. Companies that operate motor vehicle fleets typically purchase comprehensive insurance that covers accidental damage regardless of which employee or subcontractor is at the wheel. In Canada, companies may be held liable for any damages caused to or by the vehicles they own, so fleet wide insurance is a necessity. Local laws regarding fleet liability vary around Canada, but almost all regions have some kind of mandatory liability.

Errors And Omissions Liability

Canadian businesses and subcontracted businesses must insure themselves against error, wrongdoing and omission. This covers any failure to provide services agreed upon in contracts and must include over 5 hundred thousand dollars of coverage or more depending on the industry. This is especially important for businesses that work in partnership or under a contract with another business. Errors and omissions in service can lead to very large losses of revenue, and subcontracted companies need to make sure that they have enough coverage to negate any such losses without going to court.

Different industries are held to differing standards. Mortgage brokers and financial service providers, for instance, must be able to cover at least 1 million dollars with their insurance over the course of any given year of service provision. Some nonprofit organizations are expected to purchase this kind of coverage in the same way as for profit businesses depending on the kind of services they offer.

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