COMMERCIAL INSURANCE

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Every business is different. A plumber's insurance needs are different from those of a jeweller. One thing that all businesses have in common is that no matter how professionally they're run, there is always a possibility of loss, injury or damage which can force them out of business. To provide proper insurance coverage there is a wide choice of policies, options and deductibles.

Risk management

Consider your risks. Some risk exposures are obvious. Others, which could be just as serious, can lurk undetected in the background. Your insurance company can inspect your premises, assess your operations, and recommend options for safeguarding employees, buildings and goods. In many cases, commercial insurers will provide essential engineering and safety services, and the fee for these services is often included in the premium. Both you and your insurer have a vested interest in minimizing the frequency and severity of losses.

Adopting a risk management program gives a small business the opportunity to use the same loss reduction and cost control mechanisms that large companies use to save money and be more competitive. A risk management program will ensure that your company's insurance policies are competitively priced and provide coverage appropriate to the risks and their potential to harm your business.

Credit insurance

Credit insurance is a useful risk-management tool that protects accounts-receivable assets in the event of the buyer's bankruptcy or protracted refusal to pay. It protects against unforeseen credit losses and against political events such as unavailability of hard currency, changes in import/export regulations, non-payment by foreign governments, and "contract frustration" arising from acts of war.

Credit insurance is not a substitute for good credit practices and it doesn't protect against routine bad debts. Nor is it a collection or factoring service.

Environmental liability

The property and casualty insurance industry is potentially a leading partner in the prevention of pollution. There are questions, however, concerning just what can fairly be required of the industry in cleaning up pollution from times past, when many dangers were unknown or poorly understood; the roles of governments and insurers tend to blur.

More insurers are now requesting environmental audits and assessments, with no guarantee of coverage afterwards if adverse conditions are found. Seepage and gradual pollution is difficult to insure, and deliberate pollution (or damage arising from pollutants released within government guidelines as a by-product of an industrial process) is excluded.

The insurance industry's proper role with respect to the environment is in the prevention of future pollution incidents and in the clean-up necessitated by occurrences that are genuinely accidental. Insurers have no role -- nor do they have sufficient funds -- to act as a social safety-net for the general clean-up of past environmental damage.

It is possible that environmental liability may soon be a separate class of insurance totally excluded from general liability. It would be readily available, and affordable, for responsible policyholders practising prevention to strict guidelines.

Host liquor liability

Legal attitudes towards those who serve alcohol are changing; this has become a major problem for the Canadian hospitality industry and its insurers.

The scope of alcohol-related liability has expanded dramatically in Canada during the past quarter-century. The numbers and types of civil suits against alcohol providers and others who are responsible for the intoxicated has increased significantly across Canada, particularly in Ontario, Alberta and British Columbia.

Contrary to public perceptions, the scope of alcohol-related liability is far broader in Canada than the US. Moreover, liability has not been limited to taverns and commercial outlets. For example, claims have been brought against universities, service clubs, government alcohol outlets, private social hosts, common carriers, police, and sponsors of alcohol-related events.