For businesses and non-profit groups in Canada, having the right insurance is essential to surviving and thriving in a world that is full of opportunity, but also full of risk. The right type and amount of insurance will provide some financial peace of mind to organizations navigating their way through the sometimes-complex world of business. For example, in a society that is turning more and more often to the legal system to settle conflicts, insurance that protects an organization and its employees and/or volunteers from lawsuits (that is, liability insurance) is more important than ever.
For smaller businesses and community, social and recreational groups, finding and maintaining business insurance can be critical to survival. But in some cases, the risks involved in insuring these organizations make affordable insurance difficult to find. Canada’s business insurers are working with representatives from the business world, the non-profit sector, insurance companies and governments to come up with, and implement, practical solutions to this problem. With these solutions in place, Canadian organizations will have better access to affordable business insurance, and to financial peace of mind.
Coverages, deductibles and policy limits
Insurance is purchased to protect you from losses that may be significant to your organization. But what is a significant loss to one organization may be a trivial loss to another. Therefore, coverages, deductibles and policy limits must be chosen carefully.
Some of the various insurance policies available to organizations include:
Commercial general liability (CGL)
Errors and omissions
Directors and officers
Every organization requires its own set of coverages. Discuss your needs with your insurance representative. The more your representative knows about your organization, the better prepared he/she will be to advise you about the type of insurance you need.
Periodically review your insurance policy with your insurance representative. Over time, your organization may grow and your insurance needs may increase. Alternatively, you could find yourself paying for coverage you don’t need.
Deductibles ensure that insurance is doing what it is intended to do – pay for the substantial losses, not the minor ones. Deductibles help to keep premiums low. Essentially, the deductible is the amount for which you are self-insured. The higher the deductible, the lower the insurance premium.
To determine the amount for which you are prepared to self-insure, consider the following:
1. Look at the premium levels for various deductible options. The money saved on the premium by raising the deductible may or may not be worth it.
2. Consider talking with a risk management consultant to determine optimal deductible levels.
You want to have adequate coverage without being over-insured and paying too much. To make an accurate calculation, work with your insurance representative and consider the following:
1. The value of your property: If you lost everything in a fire, what would be the cost of that loss?
2. Your potential liability exposure: Property is only one aspect of what insurance covers. Insurance also protects you if you get sued. It pays for legal costs and damages if you’re found to be liable for a person’s injuries or damage to their property. Some operations are higher risk than others. A nightclub, for example, is more vulnerable to lawsuits than a flower shop and will therefore need higher liability limits.
3. Past losses: Use your claims history as a guide when comparing quotes for different policy limit options.
Your Role is Critical
Be “best in class”
To get the best possible rate and coverage for your needs, you must make your organization stand out. In insurance terms this is called “best in class.” You can achieve this by taking an active role in the insurance buying process:
- Create a relationship with your insurance representative. The more he/she knows about your operation, the better prepared he/she will be to present your organization to insurers. Prepare any supporting materials that can accompany your application.
- Ensure that your application is well organized, referenced and tabbed for easy review. Include all information about your risk management policies and procedures.
- Ensure that all information requested by your insurance representative is included in the application.
- Include any documentation that clearly describes your operation. Include an executive summary that describes your organization and why it is “best in class.”
Finally, always review the submission before your insurance representative submits it to the insurance company. Make sure the application accurately reflects your organization, its operations, your needs and the requested coverage.
Gaetz insurance agencies provides insurance services for the following areas:
Wetaskiwin, Leduc, Ponoka, Camrose, Millet, Calmar, Thorsby, Devon, Rimbey, Rocky Mountain House,
Lacombe, Beaumont, Breton, Warburg, and all rural areas in and around Edmonton.