Is Your Toronto Business Protected Against Lawsuits and Losses?

August 28, 2025 / 5 mins read

Could your Toronto business financially survive a lawsuit? What about a fire or flood? Does your small business have enough insurance?

Lawsuits and losses can quickly add up, take money out of your pocket, and even cause the closure of your Toronto business. Commercial insurance protects you against the unexpected.

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Western Financial Group, a 100% Canadian company, can help you navigate business, car, and home insurance during this period of economic uncertainty.

Wherever your small business is located in Toronto, the Greater Toronto Area (GTA), or elsewhere in Ontario, a Western Financial Group business insurance broker will get you commercial coverage that uniquely protects what you do.

Western is a trusted, national insurance brokerage that has partnered with Canada’s top insurance companies to provide commercial insurance. We work with our insurance partners to find the best business coverage at the best rate for you.

Here’s your insurance guide to protect your Toronto small business against lawsuits and losses

What are the top insurance coverages for small businesses in Toronto?

Your small businesses needs commercial general liability insurance, commercial property insurance, cyber liability insurance, flood and sewer backup coverage, business interruption insurance and product liability insurance. These insurance coverages financially protect your Toronto business against legal claims and losses that could force you to permanently close shop.

What about lawsuits? You need commercial general liability (CGL) insurance

Commercial general liability insurance protects your Toronto small business against claims of third-party bodily injury or property damage involving customers/ suppliers/members of the public. For example, a customer could slip and fall on a wet floor, get injured, and sue you.

If you were sued, CGL insurance would help cover the legal costs to defend the claim against your Toronto business in court, as well as costs to cover damages to compensate third parties whether you win or lose your legal case.

Without commercial general liability insurance, you will be responsible for paying all costs related to a third-party injury or property damage on your own.

What does CGL insurance help cover?

Injury to a third party who is not your employee
Damage to someone’s property
Damage to rented property
Medical bills if someone is injured
Legal costs and settlement costs of liability lawsuits filed against you
Liability lawsuits related to slander and libel

How is my Toronto business protected from theft or vandalism? You need commercial property coverage.

Whether you own or rent your Toronto business’s location, commercial property insurance protects your store and its contents from insured risks that can happen, such as fire, theft, burst pipe, theft, or vandalism.

If vandals smash a store window, commercial property damage would help cover the costs of replacing the window and cover any damage or vandalism inside your business.

Commercial property insurance does not automatically flood insurance. What if there’s heavy rain and the sewers back up and your business is flooded? Are you protected?

You should consider adding sewer backup or overland flood coverage extensions, which standard business insurance policies typically do not cover.

Commercial property insurance also protects your Toronto business from severe weather events, such as high winds, tornadoes, hail, and wildfires but ask for policy details about exact coverage.

How does commercial property insurance cover theft? Theft of stock is generally covered under the coverage for stock section in a commercial property insurance policy, protecting your business from financial loss due to theft of inventory.

Let your Western business insurance expert explain in detail what is covered under commercial property insurance.

How can Toronto business owners save on their insurance with Western?

Western Financial Group helps business owners save on their insurance with the following:

Bundle and save: They’re generally available when you bundle liability, commercial auto, and property insurance.
Multiple quotes to suit your needs: Western is a national insurance broker that partners with Canada’s leading insurers. We’ll get you multiple business insurance quotes to suit your needs and to help you save money.
Cost: Depends on factors such as services provided, location and size, deductibles, revenue, and any past claims

What if my Toronto business’s computer system is hacked? Get cyber liability insurance

Cyber liability insurance is recommended if you have digital contracts and payments.

Cyber liability insurance will help protect your Toronto business financially in case of a cyber-attack. Depending on the size of the data breach and the information that was taken, the customers who are affected can hold you liable and sue you for damages. That’s when cyber insurance can protect you financially.

At Western Financial Group, we help Canadian business owners understand what their commercial insurance covers and offer expert advice to make sure you’re protected for unexpected events.

What business insurance covers extreme weather?

Commercial property insurance covers damage to buildings, inventory, and equipment from certain extreme weather events such as storms, wind, hail, and wildfires. Coverage may vary by insurer and your location, so you need to review specific coverage for wildfire and natural disaster exclusions or limitations.

Most standard commercial policies exclude flood and earthquake. Coverage for floods and earthquakes are added as riders or separate policies.

What about weather-related floods?

A torrential rain has overwhelmed the local drainage system and leaves you with flooded premises or a river has flooded and your business has water damage. You need overland flood coverage added to your business insurance. Commercial property insurance typically does not cover this.

What about damage from a sewer backup?

Commercial property insurance does not cover a sewer backup. Sewer backup insurance is add-on coverage that helps protect you against:

Backup from a sewer, storm drain, or septic tank
Damage caused by sewer backups, which includes coverage for the cost of professional cleaning or replacing walls, flooring, furniture, and other belongings
Overflow from a sump pump or other similar equipment.

My business needs to shut down temporarily due to a fire. What insurance protects me in this case?

Business interruption insurance

Business interruption insurance helps support your business when it can’t operate due to a covered loss. Business interruption insurance can help you with bills such as repairs, rent, and payroll even if your business is forced to close temporarily.

Some examples of losses that can force your business to shut down:

Your business is damaged by fire or vandalism
A disruption in your supply change
Damage to a neighboring business

Business interruption insurance can help with expenses such as:

Payroll
Rent
Utilities
Property taxes
Alarm monitoring
Relocation of your business

My business is getting sued because of a product we sold

Product liability insurance helps protect you against liability claims and lawsuits arising from the products you sell and distribute.

If a product makes a customer sick, this type of insurance can help cover costs from a potential lawsuit.

It also protects your Toronto grocery store from damages from design, manufacturing, or marketing defects, such as incorrect labelling and safety warnings.

Let Western Financial Group help you protect your small business with commercial insurance

What do I do if I have a claim against my Toronto business?

Contact your broker immediately after any business-related mishap. Waiting to file a claim can confuse insurers about the severity of the damages to your business.

Know your policy so that when you contact your broker you are familiar with what will be covered or not.
Document the damage. Take photos right away and write down what happened.
Do not throw away damaged goods after taking photos. Keep the physical evidence so that your adjustor can see it.
Do not invite lawsuits. Don’t say anything that could be used against you, especially if you aren’t sure what happened.
Be honest about what your damaged property is worth. Damaged commercial property is generally valued according to its actual cash value or replacement value.

Here’s a commercial insurance checklist:

Do you have the best Toronto business insurance rate that suits your work?
Do you have the right amount for your deductible and regularly review it to make sure it’s the right amount for you?
Are you or your employees using personal vehicles for work?

Western Financial Group has licensed BUSINESS INSURANCE EXPERTS to get you the right insurance coverage for your Toronto business. Our experts are available now to help you navigate the business insurance journey to protect your Toronto business.

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5 FAQs

What kinds of Toronto businesses need professional liability insurance?

Professional liability (errors and omissions) insurance is needed for Toronto businesses that provide services or advice, covering claims related to negligence, mistakes, or inadequate work that cause financial harm to clients. Toronto doctors, dentists, lawyers, accountants, IT professionals, architects and engineers are examples of professions that need E & O insurance.

Should I underinsure my Toronto business to save money?

Underinsuring your Toronto business to save money exposes you to financial, legal, and operational risks. While underinsuring your business can help reduce insurance premiums, the consequences of underinsurance can be costly if a loss or claim exceeds the coverage limits. You can risk financial damage, reputational harm, and limited growth opportunities. Let Western Financial Group help you with your Toronto business insurance.

How often should I reassess my Toronto business insurance coverage?

Business insurance coverage limits should be reassessed at least once a year as part of a regular review to make sure coverage, limits, and deductibles match the current value and operations of your business. Coverage should be reviewed sooner whenever significant changes in your business occur, such as expansion or downsizing.

How do revenue changes affect the coverage limits I need?

As your Toronto business’s revenue increases, your risk exposure usually increases, requiring higher coverage limits to adequately protect your business. On the other hand, if revenue decreases your insurance coverage needs may need to be adjusted but should never be reduced below what is necessary for adequate risk protection.

When is choosing higher deductibles better than lowering coverage limits?

Choosing a higher deductible is generally better than lowering coverage limits when the goal is to reduce your premium but maintain adequate protection. You can choose higher deductibles rather than lowering coverage limits if your Toronto business can comfortably afford a larger out-of-pocket expense in case of a claim. Speak to a Western Financial Group business insurance expert about deductibles and coverage limits for your small business.