Business Insurance for Sole Proprietors

Business tip

Business insurance: what a sole proprietor should look at

As a sole proprietor your personal assets are on the line, so insurance is your main buffer.

First check

Your home or auto policy may not cover the business.

Personal policies often exclude or limit business activity, equipment, and business use of a vehicle. Ask your insurer directly what is and isn't covered.

Liability

General liability

Covers claims that your business injured someone or damaged their property.

Professional liability

Covers claims that your advice or work caused a client a financial loss. Often called errors and omissions, and common for consultants and other service providers.

Property

Cover the equipment you work with.

Business equipment, tools, and inventory can be insured against theft, fire, and damage, including gear kept at home or in a vehicle. Check the limits and any exclusions.

Income

Business interruption replaces lost income.

If a covered event stops you working, this coverage can replace income for a set period. Ask what triggers it and how long it pays.

Data

Cyber coverage if you hold customer data.

Helps pay for breach response, notification, and recovery costs. Worth a look if you store client details or take payments online.

Workers' comp

Owners aren't automatically covered.

In Alberta, personal coverage for the business owner is optional. If you hire workers in a covered industry, you must cover them and open a WCB account within 15 days of hiring your first worker.

Tickle & Compass

Get quotes, then compare exclusions.

Business insurance premiums are usually a deductible business expense. Confirm the details with your accountant.

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General information, not tax, legal, or financial advice. Rules vary by province and change — confirm with an accountant.