Business insurance: how to save time and money
With some 240,000 businesses, the vast majority of them small and medium-sized enterprises, Quebec is one of Canada’s economic engines, trailing only Ontario. Among the many challenges facing business owners is how to protect their company with the right insurance.
“Just as you would not drive a car without insurance, no company should operate without adequate insurance protection,” says Pierre Simoneau, President of La Turquoise insurance and financial services brokerage. “By insuring your business, you’re not only protecting your assets and your liability risk, but also in many cases a lifelong investment of time and energy. That’s so precious!”
Shopping for insurance can be complex for an individual, and as you might expect it’s that much more complicated when it comes to a business. Depending on the size and type of operation, the company will need coverage for various risks to avoid major financial losses resulting from a fire, storm, theft, computer security breach, or a simple accident, such as a customer slipping and falling on the premises.
How to simplify the process
The first step for an owner or manager is to shop around – not for quotes and prices, but for a broker. Jean-Philippe Martineau, President of insurance brokerage Groupe Ostiguy Gendron, says it’s important to find a broker you can trust to establish a strategy that can adapt to a company’s growth in the coming years: “the relationship of trust with the broker is crucial, because there may be hundreds of thousands or even millions of dollars at stake.”
Once a broker has been selected, the business owner must be prepared to answer the sometimes detailed questions they will be asked in order to determine their coverage needs: type of operations, inherent risks, gross and net income, value of leases and/or real estate assets, equipment, merchandise in stock, automobiles, etc.
It’s not a good idea to delegate this task to an employee who may not know all the relevant information. “That will only slow things down,” says Pierre Simoneau. “To save time in the long run, you need to take the time to do things right,” Jean-Philippe Martineau emphasizes.
For a thorough and productive discussion, the owner must not only know the facts about the business, but also be aware of his or her own risk tolerance, according to Gérald Charest, President of Geska Assurances Entreprises. “You’re transferring risks to an insurance company, and you have to know what those are and why you are choosing to insure them. To this end, the broker is there to help the business person make informed decisions about which coverages to purchase and which ones not to.”
Once the portrait of the business is complete, the broker asks insurance companies to provide quotes. Many products on the market are designed to meet specific needs. The broker will recommend what they think is the best value for money in light of the customer’s requirements. Once issued, the insurance policy will protect the insured business for one year, after which it may be renewed for the following year.
Mistakes to avoid
According to all three experts we spoke to, transparency is a vital element in the information gathering process. If the client fails to disclose information about prior claims or any activities outside Canada, this could cause serious issues in the event of a claim later on.
It’s also important to keep your insurance broker informed of any changes in the business during the course of the year. If you open or close a branch, begin exporting, or launch a new product line, your broker needs to know about it, so they can adjust coverage and premiums accordingly.
One last point: providing your business with appropriate insurance protection is not something to view as a necessary evil. On the contrary, the insurance broker should be seen as an ally who is there to help your business.