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Ontario Payroll Insurance

Payroll insurance in Ontario

An Introduction to Payroll Insurance in Ontario


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Ontario is a vast and beautiful province that is a study in diversity. From our people to our landscapes, every part of the world seems to be represented here – even deserts and palm trees can be found in Ontario. Of course part of the experience of having four distinct seasons is the changes in weather that come with them. Those meteorological changes have led to hurricanes, wildfires, ice storms and floods at various times in our province. Of course they are the exception rather than the norm, but Ontarians are also known for being prepared for any situation.

With millions of employees working in Ontario business parks, office towers, industrial areas and retailers, there is a need to ensure that if any catastrophic event shuts a business down, its employees are still able to put food on the table until their place of business is back in business.

There are a number of insurance coverages business owners should be aware of when it comes to managing risk and in this article we focus on the one that covers your most important asset – your employees. To make sure they’re protected if disaster forces you to temporarily close your doors, payroll insurance is coverage you need.


Payroll insurance in Ontario

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What is Payroll Insurance?

When it comes to payroll insurance it’s important to understand the terminology. “Ordinary payroll” is the payroll for all of a company’s employees – except directors, officers, managers and contract employees. In some commercial property insurance policies, ordinary payroll may not be covered after a disaster event. More on that below. 

Payroll insurance in Ontario works in conjunction with Business Interruption Insurance to provide a more comprehensive coverage for businesses in the event of a closure due to a catastrophic event like a natural disaster. 

Business Interruption Insurance can cover necessary and covered expenses including payroll for employees still working and/or those not able to work after the closure. Without the specific inclusion/purchase of ordinary payroll coverage for those employees who are not working because of the disaster-related shutdown is not considered a necessary expense and will not be covered. Payroll insurance bridges that gap to provide those employees with coverage for anywhere from 30 to 60 to 90 days or more, allowing them to continue receiving a paycheque and remain a part of the company.  


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Benefits of Having Payroll Insurance

Some benefits of having payroll insurance include:

  • The ability to retain trained staff who are not working during the shutdown. Training new, inexperienced staff has both measurable and unmeasurable costs and is an expense worth avoiding. 
  • Compliance with union contracts. Some Ontario unions have made payroll insurance a stipulation in labour agreements.
  • Employee loyalty and morale. During the onboarding of new hires, the knowledge that their pay is secure if the company shuts down after a catastrophic event increases the feeling of goodwill and makes an employee less likely to defect.
  • Ensures retention of key staff that may have unique skills, expertise or value to the organization.


Why Choose ALIGNED

Our ALIGNED Advocates proudly operate in two Ontario locations and are experts in risk management for business. Contact us today to get coverage tailored to your specific business needs by a broker who is invested in your success.


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