How Business Insurance Can Protect You!

Business Insurance

Business insurance is essential. Businesses, like landscaping for instance, need several types of insurance coverage to make sure that they protect themselves from claims made against them due to negligence, poor quality, contractual failure and many other possibilities.

Here are the different areas in which insurance is vital for the protection of a business. 

Compensating Workers

In Canada, workers’ compensation laws are largely administered by local governments. Business insurance should cover workers’ compensation. Insuring against the risk of injury claims is important because injuries can and will happen at some point during a company’s lifetime. A worker is entitled to seek compensation if they are injured in the course of their work or if they are subjected to unnecessarily dangerous working conditions. 

Although Canada has a relatively robust public/ private healthcare balance, the costs of an injury can still be very high – especially if a worker is prevented from earning money by the injury they have suffered. This means that claims for compensation can be for very large sums of money. Protecting against losses caused by these claims is a very important role of business insurance coverage. 

Handling Damages Caused By Products

Coverage of payments made to consumers that have suffered property damage as the result of a product or service is offered by companies like KBD commercial insurance Quebec. Consumers are within their rights to seek compensation to cover damages caused by products or services. 

Handling Injury Claims From Customers

Likewise, injury claims from consumers that have been hurt by a product or service need to be covered. Injuries can be caused by defective products, poor safety instructions and badly trained staff. Companies need to be covered against the possibility of their product malfunctioning or being unfit for purpose.

For example, if you run a catering business and the food goes bad or is contaminated by something, catering insurance will cover up the damages that may occur if some customers files a complaint or sues.

Protecting Against Business To Business Claims

If a business is regularly subcontracted to provide products and services for another business, they have to insure themselves against the possibility that they cannot fully provide the products and services they are contracted to provide. Subcontracted companies are liable for the failure to live up to their agreed targets.

It is essential – and in many cases a legal requirement – that subcontracted businesses cover any potential failures in order to guarantee contracting companies adequate compensation. In Canada, for instance, subcontracted companies are required to have 5 million dollars of coverage for this purpose. 

Protecting Against Material Deficiency 

No business is an island. Offering products often involves an interconnected system of subcontracts with manufacturers and material suppliers. As you might expect, this can sometimes lead to some problems.

Defective or poor-quality materials can lead to the production of inferior quality products. These inferior products can, in turn, lead to injuries, lack of promised functionality and many other issues. Companies need to insure themselves against the very real possibility of material deficiency damaging their reputation, profits and consumer safety.

Money claimed on insurance for covering these losses is typically spent paying customer compensation and paying legal fees for compensation claims against the material suppliers responsible. 

Business insurance article and permission to publish here provided by Carol Trehearn. Originally written for Supply Chain Game Changer and published on January 28, 2022.