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Eight tips for buying the right insurance

Insure your business for less



At some point, just about every business owner is forced to tighten their belt. When watching your money, it’s tempting to cut back on the things you think you won’t miss right away.

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A good business advisor will tell you that letting your insurance lag is a risk you can’t afford to take. Chartered Accountants Kevin A. Dunn of Peterborough, and Shalewa Iaboni, Partner at Soberman LLP in Toronto, both recommend that instead of giving up your insurance, you should look for value when purchasing it. Here are their eight tips for buying the right insurance to protect you and your company, especially when you need to make every dollar count. Keep things safe and secure – “Even before insurance, step one should be doing all the common-sense things to protect your property and people,” says Iaboni. Locks, fences, alarms and lighting will help convince insurers that your physical environment is a safe place for employees to work, goods to be stored and business conducted. Get professional help – A good insurance agent will analyze your situation and the risks you’re exposed to, then determine what kind of coverage you need and in what amount. Be honest about your financial situation. They’ll help you to find the best rates and most reliable coverage for your particular business and budget. Most have minimum coverage levels, but rates do vary. Get a few different quotes. Protect the public and your property – Having enough liability insurance is crucial, and the kind that you need depends on the type of business you have. At a minimum, vehicles must be insured and property protected against fire and theft. Most classes of service professionals - doctors, accountants, lawyers - must carry errors-and-omissions insurance in order to operate. Manufacturers may also need product-liability insurance in the event of consumer claims. Home-based business insurance is also recommended for those working from home, as homeowner policies may not protect you properly if the insurance company discovers you’re operating an enterprise in your basement. Protect your income – Most small businesses should carry loss-of-income insurance. In the event there’s a fire or some other calamity that keeps you from operating, it can provide some of the income the store or business would otherwise have made. If you carry a lot of inventory or have invested heavily in equipment or office contents, you’ll want to insure against their loss, as well. Protect your employees – Most employers should have Workers Safety and Insurance Board coverage for staff, even if your only employee is your children’s nanny. But owners themselves are not necessarily covered by WSIB; nor are the self-employed. Private disability insurance can be expensive depending on your business and industry, and getting enough of the right coverage for the right things is complicated. Group rates are sometimes available to small businesses or individuals through Chambers of Commerce, trade or networking associations. Shop around and ask lots of questions. Cover your debts – “If you have a mortgage on buildings, working capital or a line of credit, the bank will probably ask you to carry enough life insurance to cover your indebtedness. Not a bad idea anyway,” says Dunn. Protect your partners and investors - Partners and shareholders usually have agreements that require each be insured. Usually, the company owns the policy, pays the premiums, and gets the benefits on behalf of its owners should one member become disabled or pass away. “Key-man” insurance can also protect against the loss of employees whose contributions are significant to operations. Adjust your deductibles - Often, you can save on premiums if you’re willing to pay more up-front in the event of a claim. Look at your risks and your replacement costs to see if raising the amount of your deductible can save you even more, particularly when times are slow. Brought to you by the Institute of Chartered Accountants of Ontario


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Inst. of Chartered Accountants -- Bio and Archives

The Institute of Chartered Accountants of Ontario is the qualifying and regulatory body of Ontario’s 33,000 Chartered Accountants and 5,000 CA students. Since 1879, the Institute has protected the public interest through the CA profession’s high standards of qualification and the enforcement of its rules of professional conduct. The Institute works in partnership with the other provincial Institutes of Chartered Accountants and the Canadian Institute of Chartered Accountants to provide national standards and programs that are used as examples around the world. </em>


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