The other important area of Ontario Small Business Insurance is in health insurance and life insurance plans. Most business owners start with the first area but neglect this second area. The life and health insurance area is critical too.
As a business owner you are likely the heart and soul of the business. Without you the business would not be as strong as it is, or it would not survive. So imagine for a moment if you were unable to work due to illness or injury … the business would suffer. The longer you were unable to work the worse t it would get. If you run a one person business then an illness or injury would be devastating so much faster. A good disability insurance policy is a critical safety net.
Self Employed Disability Insurance
Two disability insurance policies should be considered if you are self employed: one to protect your income; and a second for your business overhead. Disability Business Overhead insurance pays many of your business bills while you are unable to work.
Disability income protection provides a monthly income after a certain amount of time has passed. The time lag (called the elimination period) and amount of income usually leaves a shortfall. For this reason it is wise to buy Critical Illness coverage as well. Then, if you suffer a life threatening illness (listed in the policy) you will receive a lump sum benefit tax free to use as you need.
Health Insurance For Small Business in Ontario
Ontario Small Business Insurance for health expenses like drug and dental is a big concern. It can be difficult to find affordable group insurance. But there are health insurance options available for even the smallest business.
Two areas of growing interest for health insurance are Health Spending Accounts and Administrative Services Only (ASO) plans. These plans can be used to reduce health expenditures. Caution should be used in how they are implemented to ensure CRA compliance and to ensure that there isn’t too much risk. Stop loss insurance is a start here.
Key Man Insurance
A long standing idea with life insurance is key man insurance. This type of policy is placed on the life of a key person in the business. This person would be someone who the business relies on. It could be a superstar sales person, an accountant with special relationships with creditors or clients, or an engineer with key ideas and knowledge. The idea behind keyman life insurance is to insure the individuals life with the company as the beneficiary. Then, if the key person dies money is available to the company to spend on replacing that person and making up for lost sales and profits.Coverage For Your Business Loans
Many businesses take out loans to acquire equipment and property or to implement other growth strategies. It is wise to have life and disability in place to pay these loans in the event of the owner’s death or disability. The creditor (lender) will often offer coverage with the loan. But it is better to take a private life and disability coverage instead.Diversify Your Net Worth
As you grow your business and cash flow starts to improve it is wise to diversify your net worth outside of the business. The old saying “never put all your eggs in one basket” applies even to your own business. A great place to diversify your income is into segregated funds.
These are just a few of the concerns that a business owner needs to consider when managing risk. The information on this page and the general insurance page is a good starting point for a new business owner when considering Ontario Small Business Insurance needs.
Note: Always speak with a licensed insurance professional about your specific situation. This insurance information is general in nature and the policy wordings always take precedence. It is possible that there are errors and omissions in this website and www.canada-insurance-source.com, or its authors, take no responsibility.
Keep in mind that insurance licensing, legislation, and policies often vary by province and most certainly by country. Canada Insurance Source is a free information source. So use this site to gain a general understanding of insurance with your own area and situation in mind. Make sure you review the "please read" page. Always speak with a licensed insurance professional about your specific situation.
Always speak with a licensed insurance representative about your specific situation.
This site is general in nature and there may be errors or ommissions