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Apart from wondering whether you even need insurance, as a business owner, you may also be asking how much such coverage will cost. This article examines the reasons for business insurance and describes the types of insurance products available. It also outlines some of the factors affecting the cost of insurance coverage.

Do I even need business insurance?

As a business owner, consider the resources you use to carry out your day-to-day operations. These may include vehicles, office space, equipment and supplies, employees and, yes, even you.

Could your business survive if something were to happen to any of these? Do you have enough money to deal with any business emergencies that may arise?

Loss of key assets or personnel could devastate your business and your livelihood. Insurance protects your human and material assets from potential risks. Investing in the appropriate business insurance products is not only wise, but the investment could also save you from greater costs in the future.

What type of insurance do I need?

There are various types of insurance available to help protect you—and your business—from potential liability.

Protecting people and property

  • Life insurance protects your family should something happen to you. This type of insurance is a must if you’re a sole proprietor: as the owner-operator, you’re personally responsible for all your business’s debts.
  • If you’re unable to work for period of time due to illness or injury, disability insurance will provide you with a source of income.
  • If you’re a partner in a business and your partner dies, partnership insurance allows you to buy your partner’s shares in the company so that you can continue operating.
  • No one wants to be diagnosed with a critical illness; however, should this happen to you, critical illness insurance provides you with a lump sum benefit.
  • If your business depends on key people, key person insurance can help protect you from the loss of these indispensable employees.
  • Most Alberta employers are required to provide workers’ compensation (WCB) insurance. If workers become injured on the job, this coverage provides them with the necessary benefits and services to get them back to work safely. If you operate in an industry in which employees must be covered by workers’ compensation insurance, you must open a WCB-Alberta account within 15 days of hiring your first worker. To learn more about mandatory and exempt industries, or to apply for a WCB account, visit the Workers’ Compensation Board of Alberta.

Protecting property

It’s one thing to insure yourself and your employees: you must also protect your assets and premises. Doing so will help safeguard against loss of earnings in the event of disaster.

  • Property insurance protects property and buildings owned by your business in the event of flood, fire or other emergencies.
  • If you’re leasing commercial space, the property owner likely has property insurance, but you still need to insure assets stored on these premises. Contents insurance covers such things as equipment, supplies and other resources kept at your business location.
  • If you need to stop operating temporarily because of fire or some other event, business interruption insurance covers loss of earnings until you can get up and running again.
  • You need to insure all vehicles your business owns. This also applies to any personal vehicles used for business: advise your insurance broker and ensure that you have adequate vehicle insurance.

If you operate your business out of your home, avoid assuming that your home and property insurance policy offers adequate business protection. A home-based business insurance policy is the only way to ensure you’re protecting your livelihood. Ask a lawyer, accountant or your insurance broker for knowledgeable advice.

Limiting liability

Employee error, faulty equipment and defective products can all hurt employees, customers or others involved with your business. The following types of insurance limit your liability and help protect your business from being sued.

  • General liability insurance covers employees and clients who may become injured on your premises.
  • Product liability protects you and others from any harm caused by products, defective or not, used in your business operations.
  • Professional liability insurance protects you from a lawsuit arising from error, omission or negligence while performing your professional duties.
  • Cyberattack, an electronic security breach or the theft of a media storage device can expose confidential personal and business data. Cyber liability protects you from being sued in such situations.

Insuring revenue streams

Businesses exist to make money. You need to pay employees, vendors and suppliers. When customers don’t pay, you’re stuck footing the bill—without corresponding revenue. Credit insurance (sometimes called accounts receivable insurance) helps protect you should a client file for bankruptcy or otherwise refuse to pay.

How much will my business insurance cost?

There is no standard answer to this question. Every business has different needs and preferences. Cost of insurance depends on the products you choose, the amount of coverage you need and the area in which you do business.

Understanding the products available and the type of coverage they offer plays a key role in business planning and budgeting. Ask a lawyer or accountant to help you make best, worst and expected revenue projections. The team at Lift Legal is available—and happy—to answer any questions you may have.



The information on this blog and website is provided by Lift Legal for educational purposes only. It is intended to give readers a general understanding of the law, not to provide specific legal advice. Information contained in these pages should not be used in place of competent legal advice from a licensed, practising lawyer in Alberta. Furthermore, by using this blog and website, you understand that no lawyer-client relationship exists between you and Lift Legal.

Mel Garbe

Mel founded Lift Legal with the goal of delivering cost effective legal services without sacrificing capability by effectively using modern tools to access the types of resources that larger law firms have access to. The result being that Lift Legal provides high level professional services at a greater value.

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