E&O Cost for a Business in Canada

How Much Will E&O Insurance Cost My Business?

At this point in time, it should be no surprise that all Ontario businesses need errors and omissions insurance. The marketplace in Ontario is truly unpredictable and there are lots of consumers cost for liability insurancethat may be willing to file a frivolous lawsuit against you company to try and obtain a substantial amount of money. Nonetheless, a lot of companies will be hesitant to do so, due to the costs associated with yet another insurance policy. How much will errors and omissions insurance ontario cost your business? You’ll find out below.

Nothing Set In Stone

The mass majority of business owners like definite answers. Unfortunately, when it comes to E&O insurance, you won’t receive them upfront. There is nothing set in stone and no universal answer. Each specific business will be required to pay something different. In fact, it is very rare to find two companies that pay the exact same amount for errors and omissions insurance. Instead, there are several key factors that will be taken into consideration, when the Canadian insurance company determines your premium.

Some of these will be examined in greater depth below.

The Size Of Your Company

When the insurance provider receives your application, they’ll immediately analyze the size of your business. This includes looking at the number of employees you have and your annual revenue. In general, a bigger company will be considered a bigger risk and vice versa. This is the case, because bigger entities are working with more clients and they have more employees. Therefore, the potential for problems is substantially higher.

coverage details

Your Industry

It is also vital to remember that your specific line of work will help to determine your overall cost. If the insurance provider feels that you work in a riskier industry, it is likely that they’ll chargeyour exact industry you more than other companies. Companies working in specific industries are more prone to lawsuits and they’ll be deemed riskier than others. This is yet another thing that needs to be considered, when determining your monthly premium.

The Layout Of Your Contracts

Another thing to remember is that it is sometimes possible to eliminate lawsuits, by writing your contracts in a certain manner. A well-written contract can actually decrease your exposure to liability. A poorly written contract will greatly increase your risks. Therefore, the insurance provider will probably want to inspect your contract, before they provide you with a price quote. Enhance the effectiveness of your contract and you may be able to decrease your premium.

Employee Training And Experience

While you’re at it, you should never ignore your employees. Proper training and increased experience can improve the efficiency of your employees, while also decreasing the risks involved. Therefore, the insurance provider may be willing to provide you with a discount, if you offer comprehensive training to all of your workers.

Your History

As the old saying goes, history frequently repeats itself. This is most certainly true for businesses. If a company has been sued several times in the past, it is highly likely they’ll be sued again sometime in the future. And of course, the insurance provider will examine the company’s history when attempting to determine the cost of their premium. To get the most generous cost, it is best to maintain an unblemished history.

Precautionary Measures

Finally, you should remember that your company can take quality control precautions to greatly decrease the potential for a lawsuit. The insurance provider will take note of this as well. If you have an effective quality control protocol in place, you will ultimately be able to reduce the risk, while also decreasing your premium. Be sure to tell your insurance provider of choice about your quality-control protocol, so you can use it to your advantage.

errors and omissions insurance for professionals

Understanding The Need And Purpose Of License And Permit Surety Bonds

License And Permit Surety Bonds

As someone, who resides in Canada, you may very well know all about surety bonds. However, the majority of individuals do not. In fact, most people believe that bonds are investment products and nothing more. The truth of the matter is that surety bonds are unique and they have nothing to do with investing. This is definitely true, when it comes to license and permit bonds. Within this comprehensive guide, you’ll learn more about these bonds and their purposes.

What Are Permit And License Bonds?License bond guide Canada

Before learning more, it is best to get a grasp of the basics. What precisely are permit and license bonds? These are bonds, which govern businesses and professionals. Generally, the bond is a necessity and must be obtained, before the professional will be able to obtain their licensure. Of course, it is essential to remember that there is an abundance of different license bonds and none are identical to one another. For instance, there is a General Contractor’s bond, Plumber’s bond, and an Electrician’s bond.

The Principal’s Commitment

If you’re an electrician, who wants to obtain their license, you’ll most likely need to obtain the associated bond first. Initially, this might seem like a simplistic task, which requires very little thought. The truth of the matter is that obtaining a bond will require you to make a big commitment. Once you’ve acquired the bond, you are making a guarantee to your local province and the federal Canadian government that you’ll abide by the codes and regulations, which govern your profession. Failing to live up to your commitment could result in devastating repercussions.

Public Protection

Consumers are always going to be at risk of fraud, physical harm, and property damage, when they hire a public service provider. The Canadian government has taken the necessary steps to protect the consumer from these risks, by enforcing companies to post a license surety bond, before they can apply for their business license. While, it is nearly impossible for the government to monitor each and every company that operates within the Canadian borders, the surety license bond aids in making this possible.

The license and permit surety bond protects consumers, in the event that a company exhibits unlawful or negligent behavior.

What Happens If A Company Fails To Comply With The Terms Of The License Surety Bond?

While, most companies strive to provide the public with superior service, nothing can be for certain. A minor accident can turn into a major catastrophe for a licensed company or contractor, especially if the client files a claim on the surety bond. When this happens, the company is going to be at a huge risk of having their surety bond and license revoked. It is a fact, that surety companies are forced to investigate thousands of claims every year. More times than not, the surety will find in the favor of the client. The full amount of the bond will be paid out to the claimant and the principal will be forced to repay the surety.

Different Types Of License And Permit Bonds

As mentioned above, there are numerous types of license and permit bonds. Although they work in a similar fashion, they govern different professions or activities. Below, you’ll find a breakdown
of some of the different types.

Types of Contractors

  • Electrician’s Bond – Electricians have an abundance of responsibilities. If they make a mistake, the client’s home could catch on fire and potentially burn to the ground! In order to prevent them from happening and to better protect the consumer, the electrician will need to acquire the bond and license, before they’ll be able to perform their service.
  • Plumber’s Bond – A plumber is another individual, who will need to acquire a bond. Again, a plumbing problem could result in major damages to the client’s home. By forcing these individuals to acquire bonds and encouraging them to follow the province’s regulations, the potential for problems will be greatly decreased.
  • Driveway Bond – Usually, professionals that work on driveways will be required to buy bonds. Those that intend to erect, construct, alter, or repair driveways in the country of Canada will need to get one of these bonds. The bond amount will depend on the province where you operate.

Truly, the list could go on and on. There are numerous types of license and permit bonds. Before offering your services to the public, it is a good idea to do a little research and see whether or not you need to do so.

How To Acquire A Surety Bond Within The Country Of Canada

surety Bonds in Canada

How to get a Surety Bond

There are many Canadians, who will proceed through their entire lives, without ever needing to obtain a surety bond. Others will be required to obtain a bond every year. Initially, the concept of the surety bond can be overwhelming and the thought could very well give you a fright. This is truly a misconception. The truth of the matter is that obtaining surety products has gotten much easier over the years and it is now possible to submit your application online. Within this guide, you’ll learn all about obtaining a surety bond.

Identify Your Needs

One thing that many people fail to realize is that surety bonds are enormous and very diverse. The term surety bond is often thrown around to cover a wide array of different products. When one person determines that they need a surety bond, they need to understand that the specific bond needed will vary from that of the next person. So, before you can move ahead, you need to identify your specific needs. This may require referring to the laws within your specific province, as well as the Canadian federal laws.

construction guys working

Figure Out The Amount

After you’ve identified the specific type of bond needed, you’ll next need to consider the bond amount. The bond amount will vary incredibly and will be determining by a number of different parameters. First, you should consider the bond type. Some bonds are cheaper than others. Secondly, your province will play a major role in figuring out the precise cost. If you’re trying to acquire a court bond, the judge will generally set the amount. Once you’ve figured out this amount, you might be astonished by the quantity. Don’t be! This is where the surety provider will enter the picture.

Obtaining Documents

Depending on the specific type of bond that you need, you may need a handful of documents to get the bond. Although the specifics will depend on the bond type, some of the most commonly needed documents will be listed below.

  • Annual financial statement
  • Liquid asset information
  • Net worth and finances
  • Continuity plan
  • Business plan
  • Work on hand

Again, not all of these documents are always necessary.

Getting Quotes

Now, it is time to get down to work. Once you’ve acquired the information above, you’ll know precisely what is needed. You should begin visiting the websites of Canadian surety providers. The mass majority of these groups will offer an online application or quote form. It is highly pertinent that you take advantage of this offering. By obtaining and comparing quotes from numerous groups, you will eventually be able to pinpoint the best price for your specific situation.

Remember that your personal credit score will play a major role in your final price figure. A handful of other factors, such as business history and finances, may also be impactful.

Agreement And Payment

After you’ve completed the steps above and have found a good price, a surety provider like ConstructionBond will present you a bond agreement. Be sure to carefully read through the paperwork, before signing at the bottom. An attorney may be needed, so you can avoid surprises and unfavorable terms. Once you’ve agreed to the terms, you will want to pay the fees and acquire your Surety Bond from ConstructionBond.