Kathy Pearson, AVP, Commercial Lines Process Improvement and Enablement
In recent years, the number of home-based businesses in Canada has grown significantly. According to Statistics Canada, the combination of remote work, economic shifts and changes in consumer behavior associated with the COVID-19 pandemic encouraged many individuals to begin their ventures from home.
Many home-based business owners assume that their standard home and auto insurance policies will cover their risks. Unfortunately, without business insurance, home-based business owners risk exposure to lawsuits, property damage or loss of business equipment that standard home insurance policies typically won’t cover. The same is true for auto insurance. If your vehicle is insured for personal use but you’re using it for your business, if you need to make a claim your insurer may deny it.
Whether you're running a full-time business or a side hustle, such as selling products on Etsy or making candles on weekends, commercial general liability (CGL) insurance is crucial for protecting your business from unforeseen risks.
For home-based businesses in Canada, CGL insurance often needs to be with the same insurance carrier as your home policy. Having a broker that specializes in both personal and business insurance, like NFP, ensures that your insurance is tailored to your specific situation. Our insurance professionals work together to ensure we provide seamless protection for your home and business.
Understanding the Gaps in Personal Insurance Policies
While working from home might seem low-risk, home-based business owners face unique risk exposures. Whether you're selling products, offering professional services, or running an online-only business, a CGL policy is designed to protect you from potential liability issues.
Most home insurance policies exclude liability claims related to business operations. For example, if a customer or vendor is injured on your property, or if you damage someone’s property while doing business, your home insurance won't cover those claims.
Even if you run your business exclusively from home and don’t see clients, there are still liability risks. For example, a bookkeeper may work from their kitchen table and only communicate with clients by phone or email, but they could still be held liable for damages resulting from their business. Or an online store that’s run from home could be held liable if someone files a lawsuit saying their product has caused harm.
Without CGL insurance, you could be personally responsible for paying legal fees, medical costs or property damage out of pocket.
Finding the Right Commercial Insurance for Your Business
In addition to CGL, you may need other commercial insurance coverages depending on the nature of your business. For example, property insurance protects your business assets. In most cases, items such as laptops, inventory or other equipment used for your business aren’t covered under your home insurance policy. If something is stolen out of your vehicle or damaged, it needs to be covered under a business policy. Cyber liability insurance is also very important if your business handles sensitive data.
Protecting Your Business for Long-Term Success
Whether your business is a full-time venture or a weekend side hustle, commercial general liability insurance ensures that you're protected from risks that could otherwise be financially devastating. By investing in the right coverage, you're safeguarding your business, assets and future success.
Brokers at NFP work to understand your individual business model to assess your risks and identify what you need to ensure your business is protected.
A comprehensive insurance plan not only protects your home and business but also provides peace of mind, allowing you to focus on growing your business without the fear of unexpected risks.
Kathy Pearson is AVP of Commercial Lines Process Improvement and Enablement at NFP, an Aon company. If you are looking to discuss insurance for your business, please call NFP at 1.844.811.1118, or fill out our online quote form.
About NFP
NFP, an Aon company, is an organization of consultative advisors and problem solvers helping companies and individuals address their most significant risk, workforce, wealth management and retirement challenges. With colleagues across the US, Puerto Rico, Canada, UK and Ireland, we serve a diversity of clients, industries and communities.
Our global capabilities, specialized expertise and customized solutions span business and personal insurance, group benefits, retirement and individual solutions. Together, we put people first, prioritize partnerships and continuously advance a culture we’re proud of.