Premises Liability Insurance: What Is It and How Does It Work?

At Surex, we understand how important it is to take risks and follow your dreams. After all, that's how Surex was started! Our founders had a goal and chased it.

So, why can't you do the same? 

But, whether you want to start a small business in your hometown or take over the tech industry with your new startup company, you need to take a step back and assess the hurdles that are in your way. One of these hurdles is choosing the right type of insurance for your business. In today's article, we'll be assessing one of the lesser-known types of business insurance — premises liability insurance.

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Save on business insurance by teaming up with a Surex advisor

Starting a business is no simple task. So, when it comes time to find business insurance, you may feel a little overwhelmed, especially if you have a number of other projects on the go.

That's where we step in. At Surex, our main goal is to help you save on insurance. We do this by working closely with the best business insurance companies in Canada and by staying up-to-date with the latest industry trends and news.

If you have questions about business insurance or need help finding quotes, you can reach out to one of our advisors at your earliest convenience. We can provide a collection of competitive quotes in ten minutes or less.

Contact us today to learn more!

What is premises liability insurance and how does it work in Canada?

Premises liability coverage (also known as basic liability coverage) is a type of business insurance that financially protects business owners from accidents that take place on company property.

In this context, company property is any aspect of the area that you are responsible for. This includes:

• Office spaces and similar work areas
• Parking lots
• Pathways located on the grounds or leading to the property

Here's a basic example:

A customer slips on a walkway outside of your storefront and happens to break their ankle. The customer sues your business for the injury. Your basic liability coverage will cover all or a portion of the legal expenses. Although this is a simplified version of what could happen, it gives you a general idea as to why this type of business insurance is important.

However, business owners should note that premises liability coverages do not financially protect their businesses from events that occur off of company property. For instance, if one of your employees slips and falls while delivering a package to a client, your basic liability coverage will not cover the expenses.

What's the difference between premises liability coverage and commercial general liability insurance in Canada?

Commercial general liability (often shortened to CGL) coverage is a type of business insurance that offers the benefits of premises liability coverage and much more.

This extensive form of business insurance offers a variety of coverages, including:

• Contractual liability
• Product and completed operations liability
• Personal injury 

Commercial general liability coverage is highly beneficial if your business is open to the public, you work with clients or customers in your workspace, or you conduct business on your clients' property.

The only downside to commercial general liability coverage is that it's noticeably more expensive than premises liability coverage. The price difference between the two options stems from the fact that commercial liability coverage offers more protection.

This is something that business owners should keep in mind before making a final decision. If you're still on the fence about which type of business insurance is right for you, don't hesitate to reach out to your personal Surex insurance advisor.

Do you need premises liability coverage if you rent your business space in Canada?

The type of business insurance that you'll need will depend on your landlord. In Canada, landlords have the ability to require business owners to purchase various types of commercial insurance. Your landlord also has the ability to set any limits, which is something that you need to keep in mind.

Be sure to double-check with your landlord to confirm which aspects of the company property you need to maintain (walkways, common areas, etc.). You can give your Surex insurance advisor this information to get an idea of what types of coverage you'll need and how much you'll have to pay.

Questions to ask yourself before getting premises liability insurance in Canada

We suggest that you take a moment to ask yourself these questions before you make a final decision about premises liability coverage:

How much coverage should you purchase?

The answer to this question depends on your budget, needs, and landlord's requirements. But, we suggest that you invest in no less than $1,000,000 in coverage. Getting $1,000,000 in coverage will safeguard your business from most basic risks. You can invest in more coverage if you’d like extensive protection.

Should you pay monthly or yearly?

If possible, we suggest that you pay for your premises liability insurance on a yearly basis, as this will give you access to discounts. But, if you don't have a strong insurance history, then you may have to make payments on a monthly basis.

Is the prospective insurance provider reliable and reputable?

When you work with Surex, you can feel confident knowing that you're getting coverage from the most reputable insurance carriers in the country.

What are some other types of insurance for businesses in Canada?

There are several different types of business insurance that business owners can buy in Canada.

Some examples of the various types of business coverage include the following:

• Professional liability insurance
• Key person insurance
• Cybersecurity insurance
• Crime insurance
• Directors and officers insurance

Contact your Surex insurance advisor if you'd like to learn more about the types of business insurance mentioned above.

Do you have unanswered questions about getting basic liability insurance in Canada?

Buying insurance is no walk in the park; there are several nuanced details that you need to familiarize yourself with before making a final decision. This is particularly true if you're in the process of buying business insurance.

If you have any questions about buying business insurance in Canada, know that the Surex team is here to help.