How to Read Your Small Business Insurance Policy Documents

Understanding Declarations and Coverages

The first couple of pages are the most important pages to read:

• Your address 
• Policy number 
• Effective and expiration dates 
• Premium amount
• Name of the insurance company
• Claims contact information

You always want to make sure all this information on the declaration page is correct. However, as much as your broker has double-checked it, errors can happen, and we want to amend them as soon as possible to ensure you are covered.

One important piece of information to look over on the declarations page is the “minimum retained premium”. It will provide a dollar amount, for example $200, or it will state a percentage such as 25%. That is important because it’s the amount that is non-refundable if you were to cancel your policy mid-term.

The minimum retained premium is usually on the first couple of pages. However, sometimes you can find it further on in the documents. Hit ‘CRTL + F’ and search for it if you don’t see it right away.

After the declarations page, there is a list of your coverages. That is a major reason for this policy being purchased. All the different liability limits and deductibles are outlined here. Here are some coverages and their definitions to get a better understanding of the protection that you may have purchased:

• Commercial general liability (CGL) protects you and your business from a loss if you happen to be found legally liable for third-party bodily injuries or property damage caused by the product or service you provide. A CGL policy typically includes:
  • Personal and advertising injury covers an infringement on an individual’s or business’s intellectual rights. That can include libel, slander, and copyright infringement.
  • Products and completed operations coverage protect you from third-party lawsuits alleging property damage or injury due to your product or completed services.
  • Tenant’s legal liability provides coverage for loss or damage of a property resulting from an action of a person renting space at that property.

It is essential to make sure your liability limits and deductibles are correct based on your application and what you discussed with the broker. When a certificate of insurance (or proof of insurance) is emailed to you, it is based on the coverages page in your policy documents. We always want to make sure the coverages meet the needs of your business. 

Know the Wordings and Exclusions

Exclusions outline what coverages and products are not included in your policy. The importance of reviewing this may be that there is something that needs coverage within your business, and now it’s stated in the policy that it is not covered. The wordings can be helpful as they provide definitions for such things as:

• Named perils
• An insured’s property
• Termination by insured and termination by the insurer (your insurance company)

Despite the insurance jargon in the policy, the definitions are there to help you understand what your policy states. After all, insurance companies do want their clients to know what they’ve purchased.

But don’t forget you can always contact your licensed Zensurance broker to review your policy. Feel free to call or chat live online with us whenever you have a question about your coverage. If you’re looking for insurance to cover your small business or startup, or are interested in switching insurers, get a free quote by filling out an online application. We’ll shop your rate with more than 50 leading Canadian insurance companies to find you the coverage you need at the lowest premium possible.