Thinking of starting a new business? Getting insurance may be a good idea. Business insurance can protect your property, operations, and income-generating capabilities in the event of unexpected incidents.
Do I Need Business Insurance for My LLC in Canada?
In most cases, business insurance isn’t legally mandatory for Canadian LLCs, but getting it is still a good idea. If you don’t have insurance, small accidents or minor customer complaints can balloon into massive financial penalties if you need to pay for court costs or damages.
That said, insurance can be mandatory for your business if your client or stakeholder requires it. Businesses often require their partners to have insurance to protect themselves from liability in the event of any unfortunate incidents.
How Much Does Business Insurance for an LLC Cost in Canada?
Business insurance for an LLC in Canada can cost differently for every company because every industry has different risks. Moreover, the types of coverage chosen can influence insurance costs.
To help you get a better idea of how much business insurance in Canada costs, here are cost estimates for some common industries:
- Professional services: $25-50/month
- Real estate: $150-500/month
- Construction: $60-250/month
Essential Coverages Most LLCs Need
Insurers in Canada offer a range of insurance products tailored to businesses. Selecting the right insurance coverage options for your business can be challenging, especially since opting for everything on offer may result in excessively high insurance costs.
While each business has unique protection needs, let’s take a look at some essential insurance coverage options that are useful for most LLCs:
Insurance Tips for Canadian LLCs Doing Business in the U.S.
Expanding your business into the United States can be a great way to increase your customer base and diversify your business presence. However, there are several things you need to prepare as a Canadian LLC entering the United States, including obtaining business insurance.
Keep these tips in mind when you prepare for your U.S. expansion:
What Happens If You Don’t Have Insurance?
If your business doesn’t have insurance, you may be subject to sizable medical bills or legal costs if something goes wrong with your business. It’s not just about the customers either, because without the proper insurance protection, you may be liable for medical bills and legal costs if one of your employees gets injured or dies at work.
Moreover, some businesses will only want to partner with companies that have insurance policies to ensure they’re not held liable if something unexpected happens.
Key Advice from MyChoice
- While not mandatory, having business insurance signals potential partners that you’re a safe company to work with and they won’t be held liable for unexpected events.
- Recommended business insurance types for LLCs include commercial property insurance, business income insurance, commercial general liability insurance, and commercial auto insurance.
- If you’re thinking about a U.S. expansion, check your insurance coverage as part of your expansion preparations.