Mackay Insurance Blog
As of 2016, Canada is home to an estimated 1.17 million businesses. Nearly 98 percent of these are small, independently owned and operated businesses, of which half reside in Ontario and Quebec.
However, for every new Canadian business that opens its doors in a given calendar year, another one closes its doors for good. What is the reason for such a high rate of closure annually?
One reason is the lack of business liability insurance. In this article, learn more about how business liability insurance protects your company if you are found legally liable for events beyond your individual control as owner-operator.
4 Main Kinds of Business Liability Insurance
Let's say you produce a certain product. A customer uses it and gets injured. They pursue your company for damages. Here, general liability will protect your business if you have to go to court or pay out a settlement.
General liability insurance covers your company for four types of events: bodily injury, medical costs, property damage, and slander/libel.
Also, if your company runs as a sole proprietorship or a small partnership that does not afford you as the owner the protection of a legal corporate entity, general liability insurance can protect your personal assets if you need to sign for a business loan, if you have caused someone injury, or if either you or a business partner wishes to depart the company.
General liability can also include a number of specialty endorsements as may be required for your specific industry.
Now let's say you work in a high-risk industry. Court settlements, while rare, can and do bankrupt affected companies.
In this scenario, you may want to take out what is called an umbrella liability insurance policy to protect your company from damages over and above what a general liability policy will extend to cover.
An umbrella policy is especially beneficial if your company does business internationally, runs a fleet of company automobiles, or is involved in more than one type of industry.
Directors & Officers liability
Whether your company is for-profit or nonprofit, and regardless of its revenue or total number of employees, you’re probably governed by a board of directors. Here, while your directors and officers may do their utmost to protect your company from legal exposure, sometimes even their utmost may not be sufficient to protect them from personal liability.
In this situation, you may find it tough going to attract the kind of top talent you want represented in your board of directors—unless you provide each director and officer with the protection of Directors & Officers liability insurance.
With this type of policy in place, your directors and officers can continue to do their legal due diligence for your company without fear of reprisal on a personal level for actions they take on your company's behalf.
A Directors & Officers liability policy also covers your company both for financial losses and for payment of necessary legal costs incurred as a result of any action one of your directors or officers may take.
Errors & Omissions liability
Errors & Omissions liability is no longer recommended only for those companies that operate in very high-risk professions (i.e., accountants, lawyers, physicians). In today's litigious society, many businesses can benefit from having this protective policy in place.
Errors & Omissions liability insurance is designed to protect any individual acting in a professional capacity on behalf of your company. Here, a "professional" is considered someone who
has attended training to qualify for their role.
adheres to guidelines outlined by an industry professional association or organization.
operates under a set of provincial laws or regulations.
provides their services professionally on a fee basis.
A basic Errors & Omissions policy will provide coverage up to a moderate level in the case of a breach of contract, an incorrect appraisal, a delay in provision of services, a transmission of advice that was not true or complete, a design defect, and other similar situations.
Contact Mackay Insurance Brokers Today
At Mackay Insurance Brokers, we have proudly served our clients in the Belleville, ON, and surrounding areas for 35 years. When we first opened our doors, we had just a handful of clients. Today, our client list numbers well over 5,000 and is still growing!
Together, our professional staff has amassed more than 165 years of professional insurance industry expertise. As a fellow independent business, we remain committed to helping our clients obtain the most comprehensive and protective business liability insurance coverage at the most competitive rates.
To learn more and receive a free quote, you are warmly invited to contact us at 613-966-5740 (1-888-853-5552 long distance) or online.