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Some Important Tips for Your Insurance

Please note that the information below is only for reference purposes. There are terms and conditions in your insurance policies that will govern in different situations. Should you have any questions or inquiries about additional coverage, please contact your broker or our office.


Once again, we thank you for your business.


New World Insurance

Tel: (905) 513-1818

www.neworldinsure.com

Commercial Property & Liability Policies

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Underinsurance

It is important to make sure your insured property value adequately reflects the replacement value of the property. If the insured value is too low, the “Co-insurance” condition will apply. The result is that you will only get a partial payment for your damaged property.


If you are a building owner, the replacement value for the building needs to include the cost for removing debris and any by-laws that would be enforced when rebuilding takes place.


If you are a tenant, it is important to understand what you have contractually agreed to by signing the lease. As an example most leases state that the tenant is responsible for insuring all tenant improvements. If the improvements are present when taking over the premises the assumption may be they are part of the building (and the owner’s responsibility to insure). They are still considered tenant improvements. Not insuring them will create an underinsurance situation.

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Higher Limits of Insurance

Awards and legal expenses continue to rise in the current legal environment. Some business owners have recognized their additional exposure to larger claims and mandate that proof of insurance with specific minimum limit is provided in order to access their premises. Examples include landlords, event venues and anyone letting a contractor on site.


You may not be mandated by an outside party to increase your liability limits, however you should be considering increasing insurance limits on an on-going basis.

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Directors & Officers Liability

There are legal actions which can be taken directly against directors and officers, in addition to being taken against the incorporated company. Situations such as “wrongful dismissal” or actions against director mismanagement have become more common, which exposes directors and officers to the risk of personal liability. D+O policy should be considered in addition to general liability policy.

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Employee Injuries

Workers’ injury and compensation falls within the scope of the Workplace Safety and Insurance Board (WSIB). This is not a product provided by general insurance brokers. While some businesses are mandated to obtain WSIB insurance for their employees, there are still many business owners who are not subject to this requirement. For business owners who are not subject to this requirement, we recommend them contacting WSIB directly to determine the options that are available to you. It is sound practice to voluntarily take out the coverage, or to arrange other employee protection plans that will cover the risk of employee injuries.

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Product Recall Expenses

For manufacturers and wholesaler business owners, the cost involved in recalling unsafe products may be huge. Products that appear operational may be found defective by one of many industrial regulators, triggering an immediate recall. Simply purchasing “product liability” coverage does not grant you coverage for the expenses involved in a recall.

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Earthquake & Flood

Usually mentioned together, these two coverages need to be considered individually. Although it may be unlikely that a major earthquake will occur in Ontario, we recommend that clients review their options and consider including this coverage in their policies. There have been numerous flood events in Ontario. Damage has occurred to properties where no flooding had been anticipated. With so many factors (changing weather patterns, rising water table, urbanization impact, redirecting of streams etc.) predicting future flooding is a difficult task.

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Cyber Risk

This has become day-to-day news. Some businesses are more exposed to cyber risks and greater consequential losses than others. There are new insurance products that can help cover certain expenses. Let’s talk.

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Business Interruption

How many customers would you lose if you were shut down? What expenses would you have to continue to pay with no revenue coming in? Many business owners believe they are satisfied with the amount of coverage they have for their properties; however, they underestimate the amount of cash flow that is needed to continue paying expenses when damaged property undergoes repair or restoration.

Auto Insurance

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“Listed Drivers”, “Valid Licenses”

New drivers should always be reported to the insurance company. With different rules for acceptability and rates based on driving record and driving history, non-disclosure could be grounds for coverage denial.


Specific licenses are required to legally operate some commercial vehicles. Minimum driving experience to operate these commercial vehicles is mandated by the individual insurance company. A claim could be denied if the operator was not properly licensed or did not have the experience to be acceptable under the policy.

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“Usage of Vehicle”

Insurance companies also rate auto insurance according to the usage of the vehicle. Claims can be declined if the accident occurs in a situation that is inconsistent with the reported usage.

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Optional Accident Benefits for Auto Insurance

The latest Ontario Auto Insurance Reform Act that took place on 1 June 2016 has significantly reduced the Accident Benefits coverage for all auto policies. We urge you to review all your available options and to pursue a higher level of coverage.
(Ref: www.fsco.gov.on.ca/en/auto/brouchures/Page/brochure_change10.aspx)

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Higher Liability Limits for Auto Insurance

An accident could involve multiple vehicles. There may be many passengers in one car, or involve a fully loaded school bus. You do not need to be the driver (but the owner of your vehicle letting other people operate it) to be responsible for a serious accident.

Home Insurance

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Change in Usage/Occupancy

Subletting, renting, vacancy, extended period of non-occupancy, business usage, home renovation or Airbnb – are all considered “different usage” from a residential home, used only as a primary residence. Notification and acceptance by your insurance company is required to address any of these situations.

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Valuable Items and Limits

Standard habitational policies only carry a minimal limit of coverage for these items. Valuable articles, antiques, and special collections must be scheduled and insured specifically.

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Overland Water, Ground Water, Service Line, Sewer Backup

According to the latest insurance industry statistics, water-related damage has become the number one loss exposure. New coverage can be provided according to different geographical areas and the varying needs of the insured party.

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Higher Liability Limits for Home Insurance

If you have many guests at your house when something happens, the commonly pursued $1M liability limit may not be enough. If you own a town house or a high rise condo unit and your neighbors’ properties are damaged or suffer injuries that you are liable for (which can be fire, water damage as most commonly seen), the consequence can be huge and it is very probable.

You may also consider increasing high liability limit by using an umbrella policy, which can provide higher limit on-top of and together with your auto and home policies.

Travel Insurance

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Pre-existing Medical Condition

Travel insurance companies do not cover medical expenses for treatment you receive while out-of-province for a pre-existing medical condition. Although you may have no intention of obtaining medical treatment to an existing medical condition, the pre-existing exclusion could still decline the claim if it happens during the trip.( Examples may also include: medical conditions that are not stable, pregnancy, child born on trip, excessive use of alcohol or drugs.)

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Participation in Hazardous Activities

We may all wish to be a hero once in a while, especially when we are away from home. Numerous activities designated as dangerous are excluded from travel insurance policies. Examples are sky diving, bungee jumping, mountaineering, scuba diving, airborne activities other than a passenger in a passenger aircraft, professional sports or racing. There are others so you may wish to familiarize yourself with these exclusions before you participate in any hazardous activities.

There are many fine print terms and conditions in an insurance policy that many may find less than friendly. For many years, our industry and our team has worked diligently to protect our communities, to make things fair, to be cost-effective, and to never stop improving in all of these areas.

According to IBC’s data, the Canada P&C insurance industry employed 124,900 people across Canada in 2016 and paid out $32.0 billion in the same year.

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