Special policies can cover the risks unique to your business:
Business Interruption – This form of insurance provides you with the funds required to protect your business financial position if your operations are interrupted by an insured loss such as a fire. This form of insurance is highly customizable and can include coverage for extra business expenses, rental income lost, gross earnings lost, payroll and professional fees.
Consequential Loss – A consequential loss is not caused directly by damage to property but is a consequence of other damage. For example a cold storage facility might experience significant inventory losses if an on-site transformer station failure cuts out electricity supply or a fire damages the refrigerators.
Equipment Breakdown – Many policies will exclude coverage of breakdown or damage to highly sensitive or specialized equipment including high-pressure boilers, control systems and computers, diagnostic equipment and more. Special machinery policies can cover equipment for sudden and accidental breakdown.
Errors and Omissions and Director’s and Officer’s Liability – It is common practice to protect company directors and senior managers from personal liability for actions that are the responsibility of the company they direct. While insurance does not remove their fiduciary duty, it does provide some financial protection from legal liability for a claim made against them for an alleged or wrongful act. A wrongful act is any error, misstatement, misleading statement, act omission, breach of duty or neglect allegedly committed or attempted. Errors and omissions insurance is usually used in professional services firms such as law, accounting and consulting to protect professional staff from the impact of errors and omissions in their work.
Specialized Coverages
There are as many forms of specialized coverage as there are risks to your business. Your broker can help you determine 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 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.
The best way to reduce risk is with a risk management program, which your broker can help you develop. There are four key steps:
- Know your risk exposures. The first step is to accurately identify and analyze the risk exposures to your tangible and intangible property, your income, personnel and liabilities. These can be determined in a thorough audit of your office, warehouse or shop floor to identify all perils, probabilities and potential financial consequences.
- Consider the risk management alternatives. Insurance is one form of “financing” your risk, but there are other alternatives to explore. These include eliminating the exposure, loss prevention, loss reduction and contractual transfer of responsibility for losses, for example, when a lessee assumes the liability for damages to leased space. A thorough risk management plan will examine all these alternatives before getting to the issue of insurance.
Business insurance is the most widely used of all risk financing techniques because of the cost-effective protection it provides. General and specialized policies can cover just about any peril. Another way to manage risk is to be financially prepared for a loss. One way to do this is to accumulate your own capital reserves to cover the loss, but this can tie up large amounts of capital at low rates of return.
- Implement your plan. With loss prevention and reduction plans in place, your broker can help you implement your insurance program with one or multiple insurers.
- Monitor and adapt your plan. Make sure to adapt your plan to match the changes in your business including geographical expansion, physical growth, new lines of business or increased complexity. Consider an annual review of your needs with the help of your insurance broker.
Anyone operating a business, whether it’s home-based, a large industrial operation or a professional services office, needs business insurance as part of an overall risk management strategy. You need to be protected against the most prevalent risks in your business. Your broker can help you determine the level of coverage you should consider. Risks include:
1) Property loss. Insurance against property damage or theft protects the physical assets that support your business including buildings, equipment, vehicle fleets and inventory, as well as intangible assets such as licenses, patents and accounts receivable. To arrange the right level of insurance you must know your rights and obligations as an owner, tenant, leaseholder, landlord or mortgage holder. You must also take into account local bylaws on standards for physical repair and reconstruction.
2) Liability loss. Every business is exposed to liabilities and should be protected against the major ones, including personal injury, product failures or negligence.
3) Personnel loss. Group health and benefits insurance can help to improve employee retention and well-being, reducing the cost of turnover and lost time.
4) Net income loss. Some businesses are exposed to specific perils that are beyond their control and that would cause critical damage to the viability of the business. For example, a food services operation might insure against a major electrical outage that would result in spoilage of their inventory.
Consider the underlying risk-drivers in your business.
Your broker can help you read the risks in your business and suggest an insurance mix that takes your risk tolerance and financial situation into account. The following are examples of common risk drivers:
- Heavy reliance on limited sources of income
- Dependence on one or a few people to run the business
- Elaborate and specialized physical assets
- Extensive international operations
- Sensitivity to factors outside your control, such as weather and commodity prices
- Labour unrest
- High levels of inventory
- Large vehicle fleets
- Rudimentary workplace health and safety practices
- Dangerous materials handling
You should alert your broker and your insurer of an insured loss as soon as your situation permits. Alert the police of any theft or break-in. Do not alter evidence of the loss, for example, by starting to clean up after a pipe bursts or altering the scene of a break-in. If you absolutely must alter anything, take detailed pictures of the damage first. You should also consider whether or not you should make a claim. For instance, if the loss is less than the amount of your deductible, then you cannot make a claim. Your broker can help you with informed advice throughout the whole process.
The recommended level of liability insurance coverage is usually about $2 million. Liability insurance covers the cost of damages (for accident benefits, medical costs, lawsuits and awards) in the event of personal injury or death from an accident involving the insured party. There are some situations in which you might want to increase your liability limit depending on the use of your vehicle. For example, if you drive into the U.S. on a regular basis, where liability settlements are generally higher than in Canada, you might want to consider higher coverage. You can also purchase an Umbrella Liability Policy that provides additional liability coverage to your home and car insurance. For example, If you have $1 million on your home and $1 million on your car, but don’t feel it is sufficient, instead of adding $1 million to each, you can buy an Umbrella Liability Policy for an additional million that covers both.
Your home should be insured from the moment you take legal ownership – even if it’s under construction. Home insurance covers the building, its contents and liability. Make sure you purchase a policy that reflects the unique qualities of your home, its contents and the people who live there. There are usually three parts to your homeowner’s policy:
- Building insurance covers the main dwelling, garage and any out-buildings. (Not applicable for condo owners and tenants.)
- Contents insurance covers the cost of replacing furniture, carpets and personal possessions. Valuables such as art, jewels and furs may require additional coverage. Note that most contents are insured even outside the home, for example, if stolen while you are on a trip.
- Liability policies insure against the costs incurred if, due to negligence, you are held responsible for an act causing injury or property damage to others.
You can save money by scaling down your policy, but be careful not to under-insure. There are three general policy categories, and your broker can help you choose the one that’s right for you:
- Comprehensive policies cover the building and its contents for normal risks to which a home is exposed. Some risks will be excluded, such as acts of terrorism or flooding.
- Basic/Named Perils policies help you save by letting you carry more of the financial risk. You will be covered for just the perils that are specified, for example, lightning and explosion.
- Broad policies takes a blended approach by providing named perils coverage on big items such as your dwelling and all-risks coverage on contents.
You’re likely aware of credit card fraud and identity theft, but many homeowners remain unaware of the possibility of being the target of real estate fraud. Real estate fraud includes:
- The registration of a fraudulent mortgage against your property; or
- The registration of forged or fraudulent sale documents for the sale of your property.
- The forged documents are used to transfer title, without your knowledge or permission. The fraudster can then either sell, or obtain a mortgage on the property and disappear with the proceeds.
If you are a victim, you could:
- Incur significant costs and time in regaining your title, or defending your ownership rights against others
- Have to deal with the payments and cost relating to an innocent lender, whose mortgage debt was registered on your property by the fraudster who stole your name and title
Generations Insurance offers a TG HomeSafe™ fraud protection policy from Travelers Guarantee Company of Canada. Here’s how TG HomeSafe™ protects you:
- The Policy Amount is based on the property’s present market value. As your home increases in value, coverage increases automatically, to a maximum of 200% of the original Policy Amount.
- The Policy* is effective on the date the Policy is issued, and continues for as long as you, or your estate, own the insured
- The Policy Coverage responds immediately, if your home becomes the target of real estate fraud or forgery.
- Travelers Guarantee Company of Canada will defend your ownership interest in the insured property from actions or claims from third parties, arising from fraud or forgery.
- The Policy Premium is based on a reasonable, one-time charge, which is as low as $275.00, (plus applicable taxes), for a home up to $500,000.00. Higher coverage limits are available for an additional premium
- Coverage is available for many types of residential properties, including single family homes, condominiums, cottages, residential rental (up to 6 units), vacant land, rural and leasehold lands.**
*For the actual terms and conditions of the TG HomeSafe™ Policy, contact your broker. **TG HomeSafe™ is not currently available in the Province of Quebec.
Insurance fraud drives up premiums for everyone. But there is something you can do. Insurance fraud is often the result of fairly routine manipulations of the system – a tow truck driver who recommends a garage and gets a commission for doing so, a service provider who bumps up a charge because they know the insurer is paying, or a paralegal who asks for a percentage of an insurance award. These may seem harmless to you, but they are part of the web of fraud schemes that are costing you money. When you see fraudulent activity, challenge the service provider directly or report the behaviour to the police.
Your broker can help you minimize premiums by helping to define your insurance needs and by shopping around for the best policy. Other ways to save are:
1) Don’t over or under-insure. Under-insure and you might be left carrying the cost of damage, theft or loss of property. Over-insure and you will be paying more than you have to. Your broker can help you find the right balance by examining your assets, your risk profile and your insurance history.
2) Set deductible and liability levels right. One way to control your premiums is to set a higher deductible, which means you accept more risk for covering small losses. Insurers tend to have deductibles ranging from $300 to $1000. Ask your broker to explain the cost implications of different deductibles.
3) Stay claims-free. One of the best ways to minimize premiums and obtain discounts is to avoid making claims. One of the best ways to do this is to reduce the risk factors that drive claims.
For your vehicle:
- Avoid car accidents by driving defensively and never while impaired
- Install an anti-theft system and never leave valuables in the car
- Keep your driving record clean
In your home:
- Consider a home security system
- Install smoke and carbon monoxide alarms
- Have a properly rated fire extinguisher and keep it properly maintained
- Clear the snow and ice off your walk
- Install good quality locks on your doors and windows
The short answer is yes. Residential policies have limited coverage on business property. This limit might be as low as $2000 in total, which would not cover even the most basic home office. Items covered for business are usually only covered while in the home. So, for example, if the computer you use for your home-based business is stolen while on a trip, it will not be covered. You may also require added liability insurance if you have often people coming and going from your home, or have employees. It’s best to talk to your broker about your home-based business, so you can augment your policy to give you more security.
In general, the more the insurer knows about you and your driving record the better, even if your record is less than perfect. Full disclosure at the beginning will save any risk of misrepresentation if you do need to make a claim in the future. There are three main categories of information required:
- Information about you
- Names of the drivers of the vehicle to be insured. This usually includes all licensed members of your household since it is assumed that they will use the car. Provide their names as shown on their license, the number of years licensed and the percentage of time they will use the vehicle.
- Insurance history for up to 10 previous years must be provided, including any cancelled, declined or refused insurance.
- License history of all listed drivers must be provided for the preceding three years, including suspensions, cancellations or lapse
- Information about the vehicle
- Full information about the make, model and year are required as well as the Vehicle Identification Number or VIN. Also include the details of a lease or loan if you have one, the purchase value, whether new or used, and the value of any modifications to the vehicle. If any other party has a financial interest in the vehicle this should be recorded so they are protected in the event of a loss.
- Information about your coverage requirements
- Finally, you will need to provide information of how the vehicle will be used. Is it for pleasure or business? If it is for commuting, what is the daily estimated distance? What will the annual distance be? If for business use, will you be carrying paying passengers, renting the car out to others or transporting any goods?
- You will also need to indicate your choices regarding your coverage, for example, your preferred deductible, liability limit and coverage for any special situations, including storing the car or driving in the U.S.
Some insurance companies sell directly to customers through their sales forces or agencies. Insurance brokers, like the team at Generations, are independent advisors who work for you and are not tied to any one company. This means that:
We’ll aim to get you the best coverage, price and service.
Our brokers can comparison shop to find good rates or special insurance products. We negotiate on your behalf for competitive premiums – even if it means approaching several companies to find the right solution.
We can offer objective advice. Because your broker doesn’t work for the insurance company, he or she can also assist you with objective advice if you have to make a claim.
You’ll get informed help when you need it most. The insurance industry has its own language of terms, legal issues and subtle details. You need a knowledgeable expert at every stage of the process to interpret all the rules and what they mean for you. Your broker’s advice can also be invaluable as your insurance needs change and your requirements become more complex. If there is anything you don’t understand, don’t be afraid to ask us. We are here to help.
In addition to life and health insurance, there are three main types of insurance in Canada: 1.) Automobile insurance, which covers vehicles and their equipment for accidents and theft. 2.) Property insurance, which protects home and business assets and property from perils such as fire, theft and accidental damage. 3.) Liability insurance, which protects people who are responsible for injuries or damages to third parties.
Insurance by definition is a contract in which the insurer agrees to compensate the insured for specific losses and specific perils. In some cases insurance is mandatory – such as when you want to get a mortgage or drive a car. Otherwise, it’s a wise choice for four main reasons:
1) Peace of mind. With the right type and amount of insurance, you can be protected from the risks inevitable in everyday life.
2) Makes it easier to obtain credit. Lenders may be more willing to extend your credit if they know that proper insurance is in place.
3) Helps to prevent loss. Brokers and insurers work to help prevent loss with information and advice on road safety, anti-theft, fire prevention and fraud reduction.
4) Frees up capital. Because insurance protects your assets, you do not have to put money aside in case of future losses.