We sat down with Kevin Etkins, a New Business Insurance Broker at isure who is one of many knowledgeable members of our team. Etkins has been a Commercial Account Manager at isure for over a year. With almost 17 years of experience in the industry, we had an informative chat about starting a small business and the tips and insurance know-how to do so successfully.
Starting a small business can be an intimidating, albeit rewarding, process. It has many different aspects and steps, especially if you have no experience. One of the most critical steps is ensuring you have the required business insurance to back you up in case the unforeseen occurs. However, the world of business insurance itself can be daunting without any experience. So, let’s get into it. As a business owner, what do you need to get started? Here are the most common questions answered.
How do you describe business insurance to someone starting a small business?
It’s good to get a quick rundown to know where to start in order to understand business insurance and fully begin a small business. We asked Kevin Etkins how an isure broker typically describes business insurance to someone getting their foot in the door.
“Well, commercial insurance is what you purchase to protect your assets. This can be your vehicles or any property that you have,” Etkins states. “It also has protection against any risks that you might be exposed to, as well as your liabilities.” When you purchase small business insurance, your coverage will be determined by your business type, size, and different risks. Different insurance coverages can include general liability, commercial property, and workers’ compensation insurance. Contact one of our isure insurance brokers to find which suits you!
What types of business insurance do you recommend for someone starting a small business?
“Well, your CGL (Commercial General Liability) policy will always be your base policy that you start with. You will want to increase your coverage from there,” Etkins explains. “We’ll [then] start looking at other things, such as Professional Liability or Warehouse Liability.”
The types of coverage you will want to extend will differ significantly depending on the type of business you are running and how you choose to operate it.
“As always, we recommend Cyber Liability Insurance, as this is one of the fastest-growing coverage types right now.”
Can a business owner purchase insurance before their business is registered? What does that process look like?
Contrary to popular belief, you can purchase insurance before starting or registering a small business.
“You don’t have to have your business registered to get insurance,” Etkins states. “So, a lot of our clients will operate as a sole proprietorship in which you can get your insurance policy set up. From there, you can always register your business a little later.”
What part of the business opening process should you begin looking into insurance?
“Well, the moment you realize that you are going to start a business, you should be reaching out to [one of our] broker[s],” Etkins states. According to Etkins, a broker will do much more than sell you insurance; he or also provide you with risk management solutions.
“We also work in the risk management space, so we can advise you of what potential risks or hazards may come from starting a small business,” he continues. “Even things you should be aware of before committing to starting a small business.” Ideally, Etkins believes the best time to call your provider is when you decide to start a small business.
What is the step-by-step process of obtaining business insurance?
Generally, the process will differ slightly depending on the type of business you want to open. Different specifics and business types slightly alter your steps. However, Etkins believes the first step is always to ask your isure broker about any uncertainties. “Well, the first step would be just to call us. At that point, we’ll talk to you a little about what you do and how you do it.”
Etkins believes it’s crucial to talk to your broker about your business as a crucial part of obtaining business insurance. “You’re going to be the biggest promoter of what you do. We like to tell people to imagine you’re talking to an old friend you bumped into in a grocery store, and you want to talk to them about your new business.” This helps our brokers best assist you with your policy.
Do you recommend a new business owner purchase insurance when starting a small business? Is it a legal obligation?
“Well, unlike auto insurance, [business insurance] is not mandatory,” Etkins states. “However, I definitely recommend getting business insurance. It will be the only thing that will protect you against any losses, claims, or unexpected incidents.”
When a company doesn’t have business insurance coverage, losses and claims can cause significant damage to a business. You will likely be liable for repairs or damage, and paying out of pocket can cause businesses to suffer and, more often than not, shut down before they even begin.
What are the risks of not purchasing business insurance?
“Well, when you don’t purchase insurance coverage, the risk is that you become personally liable for everything you do,” Etkins states. “Let’s take a look at the entertainment industry as an example. If you don’t have the recommended insurance and something happens to a patron attending an event, you [can] be held personally liable for any lawsuits during that time.”
As mentioned above, lawsuits and other mistakes paid out of pocket can cause significant monetary hardship to a company or new business.
How often should someone review their business insurance coverage?
“Generally, your business coverage should be reviewed at each renewal period. However, you should also renew it whenever you notice any changes or are aware of any changes in your business operations or revenues.”
What do you recommend people look out for when shopping for business insurance for the first time?
“Well, I would say that when you’re looking for different policies, it’s good to remember that they aren’t all created equal. So, you will want to ask yourself what the subjectivities are.” Etkins explains. “Those are the limitations or guidelines an insurer may have on how they are willing to write a policy.”
In addition, Etkins believes it is always a good idea to check and be aware of your policy exclusions.
If someone starts a home business, do they still require business insurance?
“If someone is starting a home business, they have several different options they can choose from,” Etkins explains. “Ideally, they can return to their home insurance carrier and get an endorsement. This allows them to run a business in the home.” However, not all markets are willing to take that on. Luckily, there are alternatives!
“Some other options may include your carrier recommending a separate business insurance for their operations that will be conducted at home. There are a lot of different variables that come into play. Will you be having visitors at home? Are you going to be babysitting? If so, how many kids will you take on at a time? There are limitations to what an insurance provider is willing to allow.”
If you plan on starting a small business from home, you may have to look into an actual commercial or business policy.
Is there a minimum liability insurance requirement in Ontario for starting a small business?
“Since business insurance isn’t mandatory, there won’t be a minimum requirement. Oftentimes, what will happen is that the client will stipulate the minimum requirements that the business owner should carry for their insurance,” Etkins states.
“We learned in discovery with the client that certain coverage may just be protecting the other party. So, in discussion, they may have additional exposures. When this happens, we may need to look at increasing limits elsewhere to ensure they are [adequately] protected.”
Starting a small business: Conclusion
Starting a small business can be complicated and intimidating, but it’s worth it! With the proper preparation and steps, you can run a successful startup business. Part of that preparation includes obtaining the right business insurance policy. If you have any questions regarding business insurance for your small business, please contact us or request a quote today!
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