Bulletin 122 April 2009 Know Your Risk Exposures
- Posted at: September 25, 2021 04:23:21

Anyone operating a business, whether it’s home-based, a large industrial operation or a professional services office, should consider commercial insurance as part of an overall risk management strategy. Every business has unique insurance requirements, and your commercial insurance should be designed to protect against the most prevalent risks to the assets and capital in your business. Your broker can help you itemize and quantify those risks, and determine the level of coverage you should consider. Risks include:

Property loss: property insurance provides protection against most risks to property, such as fire, theft, and some weather damage. It includes specialized forms of insurance such as fire insurance, flood insurance, earthquake insurance, or boiler & machinery insurance. Property is insured in two main ways – All Perils and Named Perils. All Perils cover all the causes of loss not specifically excluded in the policy. Common exclusions on All Perils policies include damage resulting from earthquakes, floods, nuclear incidents, acts of terrorism, and war. Named Perils require the actual cause of loss to be listed in the policy for insurance to be provided. The more common named perils include such damage causing events as fire, lightning, explosion, and theft.

Liability loss: protects businesses from claims arising from bodily injury, personal injury, or property damage liability arising out of operations or property ownership. It includes protection for civil suits arising from services rendered, products sold or operations in general, including coverage for accidents occurring in and around premises owned or occupied by the Insured. Coverage payments include judgments, attorney fees, court costs, or other related expenses.

Personal loss: life & health benefits insurance can help to improve employee retention and well-being thereby reducing the cost and lost time due to turnover.

Loss of Income: if your business property was destroyed, how long do you think your business could survive? If your answer was “I have no idea”, you’re not alone. It’s a little-known fact that when a property is totally destroyed, it often takes six months to a year – and sometimes longer – for a small business to return to previous income and production levels. Most business fail to re-open following a serious loss as they cannot withstand the loss of cash flow. Insurance that protects against this loss of income is also known as Business Interruption Insurance.

In addition to the types of protections discussed above, there are as many forms of specialized coverage as there are risks to your business. A broker can help you assess the probability of experiencing a loss and determine whether or not you should purchase specialized coverage. Talk to your broker to see if there are risks unique to your business that require extra protection. For example:

• Crime – designed to protect against loss of money or securities, including theft overnight or on the way to the bank. This also includes protection against employee dishonesty.
• Electronic Data Processing Systems – protects your computer and its data.
• Sewer Back-up – covers loss or damage caused by the backing up of sewers, sumps, septic tanks or drains.
• By-Law Coverage – covers additional expenditures resulting from by-laws regulating construction when reinstating a building after a loss.
• Cargo / transit, etc.

This article was contributed by Firepoint Inc, serving the GTA since 1997, developing fire department approved fire safety plans for newly constructed and existing buildings. Although every effort is made to ensure the accuracy, currency and completeness of the information, the bulletin publishers and authors do not guarantee, warrant, represent or undertake that the information provided is correct, accurate or current and shall not be liable for any loss, claim, or demand arising directly or indirectly from any use or reliance upon the bulletin information. Bulletin reproduction in whole or in part is prohibited without the written consent of Firepoint Inc. Copyright 2021 – All Rights Reserved. See www.firepoint.ca or call 905-874-9400.

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