Your Insurance Needs

Businesses with assets should have business insurance. Think seriously about the type and amount of insurance that your business requires, then work with a knowledgeable insurance broker, preferably one who has experience insuring your type of business. Ask business associates and acquaintances for the names of reliable brokers. It pays to obtain competing quotes. Sometimes the rates are negotiable.

The following is a list of several types of insurance you may want to consider:

1. Property insurance covers damage or loss to the premises, equipment, and inventory because of fire, explosion, wind, riot, smoke, theft, etc.
2. Liability insurance covers claims of bodily injury or property damage sustained by customers or others either on your business premises or during business-related activity.
3. Business interruption insurance compensates for revenue lost during a temporary halt in business caused by (for example) fire, theft, or water damage.
4. Disability insurance supplies you with an income if you become sick or injured and cannot operate your business.
5. Business owner's life insurance (or partnership insurance) ensures that if one partner dies, the other will have the funds to purchase the business.
6. Automobile insurance covers physical damage and personal liability for company-owned vehicles or vehicles used for business.
7. Fidelity bonds guarantee against loss from embezzlement by employees having access to cash receipts or other company funds.
8. Performance bonds ensure clients that contractors will complete a particular job satisfactorily.

Example start-up: Edna's Bakery

Step 1:
Edna registered her business as a proprietorship with Corporate Registry

Step 2:
After choosing a location, Edna went to City Hall to obtain zoning approval to build her bakery

Step 3:
About the same time, Edna got a business licence from the City

Step 4:
Because she wanted to run a food preparation business, Edna also contacted the Local Board of Health and Health Protection. (Government of Canada)

Step 5:
After setting up her bookkeeping system with her accountant, Edna went to Revenue Canada, Business Window to obtain a business number that will apply to GST, corporate taxation, and source deductions (tax, CPP, UIC) for planned staff.

Step 6:
Workers Compensation was the last stop to register her business for coverage.