As the holiday season approaches, many Ontario business owners plan to close their businesses temporarily to enjoy the festivities. While taking a well-deserved break is important, ensuring your business is protected during this period is equally crucial. Taking appropriate precautions can lead to significant financial and legal consequences, with some risks potentially not covered by your insurance policy. Follow these practical tips to safeguard your business and avoid costly setbacks:
1. Review Your Insurance Policies
- Before your business shuts down, carefully review your insurance policies. Ensure you understand your coverage, terms, and any specific requirements during periods of inactivity.
Risk: If your property is unoccupied for an extended time without regular monitoring, some policies may exclude coverage for damages such as water leaks, vandalism, or theft.
2. Secure Your Premises
- Implement robust security measures to protect your business property. Double-check that all doors and windows are securely locked, and activate any alarm systems. Consider notifying your security provider about your closure dates. Ensure outdoor lighting is functional to deter trespassers and remove valuables from easily visible areas.
Real Ontario Example: A Mississauga electronics store closed for two weeks during the 2021 holiday season without upgrading its security system. Thieves exploited a broken surveillance camera and bypassed an outdated alarm system, resulting in $80,000 worth of inventory stolen and $15,000 in property damage. The insurance claim was denied as the insurer cited negligence in maintaining adequate security measures.
3. Prevent Property Damage
Water and Heat: Turn off your water supply to prevent leaks or flooding. Ensure the heat is on sufficiently to avoid frozen pipes, as freezing temperatures can cause pipes to burst.- Risk: If you fail to maintain heat and pipes burst due to freezing, your insurance policy might exclude coverage, considering it a preventable issue.
Real Ontario Example: In December 2022, a boutique clothing store in Toronto's Queen West district closed for two weeks during the holidays. The owner didn't maintain adequate heating, resulting in burst pipes. The damage affected $50,000 in inventory and required $15,000 in repairs. The insurance claim was denied because the property wasn't maintained at minimum temperature requirements.
4. Check on the Property Regularly
- Arrange for regular visits to your property, either by yourself or a trusted person, ideally every 48 hours. Ensure inspections meet Ontario insurance requirements and follow Workplace Safety and Insurance Board (WSIB) guidelines for staff conducting checks. Document these inspections to comply with Ontario's Limitations Act.
5. Ensure Snow and Ice Removal
- Arrange for regular snow and ice removal on sidewalks, parking lots, and walkways around your property. These areas must remain safe for visitors, tenants, or passersby.
Risk: You could face a lawsuit if someone slips and falls on icy or uncleared pathways. Additionally, your insurance might not cover liability claims if it’s determined that proper maintenance wasn’t performed.
Real Ontario Example: An Ottawa restaurant faced a $75,000 lawsuit when a pedestrian slipped on ice outside their closed establishment during the 2021 holiday break. While the business had arranged snow removal, the service wasn't scheduled frequently enough during a severe storm. This highlighted the importance of maintaining 24-hour snow removal contracts during closure periods.
6. Prepare Your Team
- Inform employees about the closure dates and emergency protocols. Designate a point of contact for urgent matters. If you employ security or maintenance staff, provide them with clear instructions for monitoring the property during the holiday.
Risk: Inadequate preparation may result in staff being unable to respond appropriately to emergencies, exacerbating potential damages or liabilities.
7. Update Your Customers
- Notify your customers and suppliers of your holiday schedule well in advance. Use email, social media, and signage to communicate your closure and reopening dates.
Risk: Failing to communicate closure dates can lead to missed opportunities, frustrated clients, or contractual disputes if deadlines are missed.
8. Mitigate Cyber Risks
- For businesses operating online, ensure cybersecurity measures are up to date. Disconnect unnecessary devices and secure sensitive data to reduce vulnerability to cyberattacks during periods of reduced oversight.
Risk: If a data breach occurs and it’s found that basic security measures weren’t in place, you could face liability issues and reputational damage, with some cyber insurance policies excluding coverage in such cases.
Real Ontario Example: A Mississauga-based online retailer experienced a ransomware attack during their 2022 holiday closure when most staff were away. They now implement:
- 24/7 cybersecurity monitoring
- Regular system backups
- Emergency IT support contracts
- Staff training on remote security protocols
Proactive Protection Prevents Financial and Legal Consequences
These proactive steps can help you avoid costly insurance claims or legal disputes. Failure to prepare your business for holiday closures can leave you exposed to significant risks, including:
- Denied Claims: Insurers may reject claims if damage or liability results from preventable negligence, such as failing to maintain heat, secure the premises, or remove snow and ice.
- Lawsuits: Neglecting safety measures, such as snow removal, could lead to personal injury claims and financial damages.
- Increased Premiums: Avoidable claims can lead to higher insurance premiums or difficulty obtaining coverage in the future.
By taking precautions now, you’ll not only protect your Ontario business but also enjoy your holiday break with peace of mind. For personalized advice or to review your policies, contact Youngs Insurance Brokers today. We’re here to help protect everything that matters to you—during the holidays and beyond.
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Disclaimer: The information provided on this blog is for educational purposes only and is not intended as professional insurance advice. The coverage, terms, and conditions of each insurance policy are unique and subject to individual circumstances. The information provided does not guarantee the availability or suitability of any insurance policy for your specific needs. You should not rely on the information in the blog as an alternative to professional advice from your insurance broker or insurance company. If you have any specific questions about any insurance matter, please consult a licensed insurance broker for personalized advice and guidance.