Should I worry about a trades business's WSIB history before I buy it?
Yes, a trades business's WSIB history deserves real attention during due diligence, because how you buy the business determines how much of that history follows you. In a share sale, you're buying the corporation itself, so its WSIB account, its premium rating, and its claims history all come with it, including any surcharges tied to a poor claims record. In an asset sale, the buyer typically opens (or continues) its own WSIB account and is not automatically saddled with the seller's claims history in the same way, though outstanding premiums owed by the seller can still create practical complications if not addressed at closing.
A poor claims history isn't just a cost concern; it can also signal deeper problems with how the business manages workplace safety, which affects future premiums and risk regardless of which structure you use. Requesting a clearance certificate and reviewing recent claims experience before closing lets you price the risk, negotiate an adjustment, or require the seller to resolve outstanding issues first.
This is standard due diligence territory, alongside financial statements and litigation history, and worth building into your purchase agreement's representations and closing conditions either way.
Key takeaways
- WSIB claims history and premium rating generally follow the corporation in a share sale.
- An asset sale generally lets the buyer start its own WSIB account, but unpaid premiums still need addressing at closing.
- A poor claims history can signal deeper workplace safety problems worth pricing into the deal.
- Request a clearance certificate and claims review as standard due diligence.