Holding companies offer a whole host of benefits, which is why so many businesses choose to use holding companies. That said, even though the purpose of holding companies is often to reduce liability and/or for tax optimization, owning one still comes with risk. Thankfully, holding company insurance exists, and ALIGNED can help you find it. We are a full-service commercial insurance brokerage with thousands of clients across Canada. From directors insurance to employment practices liability and commercial general liability to cyber liability and business interruption insurance, the ALIGNED team is committed to finding the right policy for your holding company.
Holding company insurance 101
Before we dive into what holding company insurance policies cover, let us first explain what holding company insurance is. Holding companies are typically business entities that own the assets or ownership of other companies. They may also be referred to as umbrella or parent companies, and they generally have oversight capacities, meaning they do not participate in the day-to-day operations of a business. Like any business, operating a holding company comes with risk. From a claim being brought against a director or officer to property damage, bodily injury, and more – there is a lot that can go wrong. That’s where holding company insurance comes in. With the right commercial insurance policy, you can safeguard your holding company against a wide range of financial risks.
What insurance coverage does your holding company need?
The answer to this question is ultimately up to you and is based on your actual operations. However, many holding companies find some of the following coverages to be beneficial or at a minimum it could be beneficial to at least explore the possibility of having the holding company added as named insured on any or all of these in case they are named in a suit against one of their subsidiary companies:
- Directors and officers liability insurance: Directors and officers liability insurance is often important for holding companies. Without it, members of your executive committee or board of directors could be held individually liable for their actions (such as a breach of fiduciary duty or duty of care). But with directors and officers liability insurance, you will be protected should a claim be brought against them and/or you.
- Employment practices liability insurance: Employment practices liability insurance is a type of liability insurance that may be part of your directors and officers liability insurance coverage. It aims to cover wrongful acts arising from the employment process and workplace conduct. Therefore, employment practices liability claims may relate to wrongful termination, discrimination, sexual harassment, retaliation, defamation, invasion of privacy, failure to promote, deprivation of a career opportunity, negligent evaluation, and more. Though employment practices liability insurance policies vary, they typically protect directors and officers, management personnel, and employees.
- Commercial general liability insurance: Commercial general liability insurance is important for all companies, including holding companies, as it can protect them against claims of third-party bodily injury or property damage. For example, if a customer visits your office and slips and falls on a wet floor in the lobby, they might sue you. Thankfully, with commercial general liability insurance, your insurance provider may cover any legal fees and medical expenses up to the policy limit.
- Commercial property insurance: Commercial property insurance protects your holding company’s physical office space and any business-related contents (e.g. computers or furniture) from damage caused by an insured peril. It is up to each policyholder to decide which perils to include with their policies. Perils may range from fire and theft to water damage, windstorms, vandalism, and more.
- Cyber liability insurance: Cyber liability insurance can help protect your holding company from a cyberattack or data breach. This type of insurance can cover the cost of damages and legal fees if your company falls victim to a hack. Other costs that may be covered include credit monitoring, client notification, restoration fees, etc.
- Business interruption insurance: Business interruption insurance can protect your holding company from lost income if it is forced to close due to an insured peril. Insured perils covered by business interruption insurance vary but can include theft, fire, vandalism, windstorms, water damage, and more.
How to buy holding company insurance
Curious about how to buy holding company insurance? It may be easier than you think! By purchasing holding company insurance through an ALIGNED Insurance broker, you will enjoy all the benefits that it offers and the advice and guidance which ensures it is done right. You will have a commercial insurance expert at your fingertips who will shop around on your behalf and you can rest easy knowing you’re getting the best possible rate for your policy. When you contact ALIGNED, you will be connected with a dedicated insurance broker whose sole job is to understand your holding company’s and entire organization’s insurance needs and find a policy that meets them. It’s as simple as that. Contact ALIGNED to learn more about the process of buying holding company insurance through a broker today.
What factors impact the cost of holding company insurance?
The cost of holding company insurance varies because insurance companies use many factors to calculate premiums. For example, factors that can impact the cost of holding company insurance include the size and location of your holding company, the operations of your subsidiary companies, your insurance claims history, and the number of people you employ. To help you understand which details matter most, we have put together this list of some of the main factors influencing the cost of holding company insurance. Check them out below.
- The industry, size, and location of your holding company
- Your years of experience and training
- Your insurance claim history
- The number of employees at your holding company
- Your holding company’s annual and projected revenue
- Your holding company’s quality control procedures
- The coverage options, policy limits, and policy deductibles you choose
Overall, if you’re considering buying holding company insurance, the first step is to contact ALIGNED and obtain a quote. One of our insurance experts would be pleased to assess your holding company’s unique circumstances and provide you with an accurate and competitive quote.
Why buy holding company insurance from ALIGNED
If you’re ready to purchase holding company insurance, then we suggest doing so from a reputable insurance brokerage like ALIGNED. Working with an insurance broker offers a multitude of benefits, which we outline below.
Brokers have the resources and expertise to get the job done
Brokers are insurance experts who are knowledgeable about a wide range of insurance products. This means that there is no one better to help you find a great policy at a competitive rate.
Brokers work for the customer, not the insurance companies
Brokers work independently of insurance companies. This means that ALIGNED is always able to put the customers’ needs first. We will take the time to listen to your coverage needs and match you with a personalized policy that meets those needs.
Brokers work behind the scenes
One final reason to work with an ALIGNED broker is that insurance brokers do all the heavy lifting. Scouring the internet and comparing rates is tedious and time-consuming. Let us do it for you while you sit back and relax. We will reach out to top insurance companies, obtain and compare quotes, and present you with multiple top-quality options. Working with a broker couldn’t be easier or more convenient.
ALIGNED your holding company with unbeatable commercial insurance
For commercial insurance solutions you can rely on, look no further than ALIGNED. We know the ins and outs of the insurance industry and will ensure we find you a great policy at an affordable rate. Whether you still have questions about holding company insurance, want a professional opinion on the best coverage for you, or want to request a quote, get in touch with ALIGNED today. You can also get started now by clicking here for a free quote.