At BizON we believe that our members should have a resourceful community in order to have the ultimate buy/sell experience. We are happy to say that we are one step closer to providing our members with advice from every angle when considering to buy or sell a business.

This week we feature an article from one of our partners, Cornerstone Insurance, written by Jeff Aube, VP of Commercial Lines & Nadine Evans, Director of Marketing.

Don’t Be Afraid of the “I” Word! What you need to know about insurance for your business.

Are you planning on buying or selling a business? Here are some things you need to know about business insurance:

As the Buyer:

  • If you are buying a business, you must secure your own commercial insurance, as the existing owners’ policy is not transferable to you.
  • You have most likely had a market value appraisal completed to help arrive at the purchase price for the business. A market value appraisal will include depreciated value of all property. REMEMBER. that you must insure the physical assets of the business on a replacement cost basis and it is valuable to have a replacement cost value assessment completed as well.
  • Liabilities transfer to you if you purchase an existing corporation with claims or situations that might give rise to a claim.
  • The bank will require, among other things, proof that their interest is secured in the event that you have borrowed money to make the purchase. Typically, you will need to provide a copy of your policy or certificate of insurance noting the lenders interest before they will release funds.

As the Seller:

  • If you are selling your business, the new owner cannot just assume your commercial insurance policy. Instead, the buyer needs to purchase their own policy.
  • If you own the real estate (building), will you be retaining it in the sale? If so, you must keep it insured.
  • Liability extends to you far beyond the sale of the business. Confirm what policy form your liability coverage is to ensure adequate protection after the sale.
  • Will you be staying on as an employee after the sale of your business? If so, how are you compensated and subsequently, how will you be insured?

Want to know more? Cornerstone Insurance Broker has been working with some of Canada’s leading businesses for more than 30 years. Feel free to contact them at 1-888-768-8001,, or visit them online at & tell them BizON sent you 😉


From The Desk of BizON,