Business insurance in Alberta protects the interests of small business owners against unforeseen and unexpected risks. It is practically impossible to imagine how business owners in Alberta would carry on their day-to-day operations without an adequate business insurance cover.
To illustrate this point below are some examples of how business insurance provides coverage to start ups. Without this cover they would have surely ended up paying a lot of money out of their own pocket.
Inadvertent release of sensitive customer information:
Which information was released?
The company used to send out a newsletter and other promotional material on a regular basis to its customers. This included special offers and advice. Everything was working fine until one day; an employee mistakenly attached a spreadsheet of their clients that contained detailed billing information.
The risk and potential costs to which the company was exposed
The company approached its legal attorney who advised that the company contact all its clients, advise them of the breach and offer support to manage their exposure. While this looked easy, the potential costs of such a measure was coming out in hundreds of thousands of dollars, not to mention the ever-lurking danger of potential lawsuits that could be filed by the clients, and negative public relations.
How they were saved with insurance?
Luckily, the company had taken a business insurance cover. It quickly filed a claim. Secondly, it offered credit monitoring services for all its impacted clients and hired a PR firm to manage their reputation. There were costs and legal expenses involved in these efforts. However, as the company was also covered for legal costs associated with the ensuing lawsuits, it did not have to shell out any money out of its own pocket, including the legal costs which in total exceeded $300,000.
Office destroyed by flood
How did the office get flooded?
For some unknown reason, the pipes in the office burst without any warning and the office got flooded.
The risk and potential costs to which the company was exposed
The office furnishings got damaged and the team couldn’t use the office at all. As temporary office places were expensive and difficult to find, the company didn’t have a place to work for a few months. This situation caused a dent in sales and revenue fell down.
How they were saved with insurance?
Fortunately, the company had purchased property insurance and business interruption insurance. They were saved from trouble because their insurer covered their relocation cost to a temporary office and even installed the equipment, so that they could run their business. Without insurance the business would have simply closed down.
Key staff required hospitalization at an important juncture
What was the reason?
The Head of Sales in a company was diagnosed with a terminal illness just before the first sales deal was about to be signed.
The risk and potential costs to which the company was exposed
The company had four other employees. However, they were already overloaded and not in a position to take up additional workload. Secondly, they did not have skills in B2B sales.
How they were saved with insurance?
The company had purchased a key person insurance policy and this allowed them to immediately hire and train an experienced sales professional, even though the person had a high salary. Secondly, the company was covered for the short-term fall in revenue during the transition period. This alleviated the fears of their investors and key customers, and allowed them to focus on running the business.
Company was sued by their competitor for damages
What was the lawsuit about?
The company had published a blog on social media stating their new business model and how they were better off than their competitors. As a result, the competitors of the company felt offended, and one of them sued the company for damages.
The risk and potential costs to which the company was exposed
The company had to fight the lawsuit even though it was a frivolous one and had little chance of winning. The legal costs started mounting and the company’s reputation was at stake.
How they were saved with business insurance?
Luckily, the company had coverage for legal expenses due to libel. As a result, they did not have to pay for any damages and legal costs out of their own pocket. All expenses were covered by the insurance company.
Conclusion
The importance of business insurance can never be overstated. It is important to have business insurance because the financial consequences of a potential mishap could easily wipe out not only the assets of a small business, but even lead to it’s closure. Business insurance always provides coverage in case of unforeseen or unpredicted risks and it is advisable for small businesses in Alberta to get expert advice on all aspects of insurance from Beneficial Insurance Solutions based in Calgary.