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Article Contents
Picture of By <span>Aren Mirzaian</span>
By Aren Mirzaian

Updated on November 20, 2024

Visit author page
Picture of By <span>Aren Mirzaian</span>
By Aren Mirzaian

Updated November 20, 2024

Visit author page

6 minute read

Article Contents

Commercial insurance is essential for protecting your growing business from losses that may occur due to unforeseen events or daily business operations, such as errors or property damage. But what type of business insurance should you get?

Read on to learn more about this and other useful information about commercial insurance, such as coverage options and how to get an affordable quote online.

Quick Facts About Business Insurance in Canada

  • Commercial business insurance premiums are tax-deductible, which can help reduce overall business expenses and improve cash flow.
  • Certain types of businesses may be legally required to carry specific insurance coverages, such as workers’ compensation or liability insurance.
  • Business insurance isn’t required to run a business in Canada, but it’s still worth getting for protection from costs that may threaten your business’ survival, such as claims and operation interruptions.

Most Common Business Insurance Coverage Options in Canada

Canadian businesses can choose from a variety of insurance policies tailored to their specific needs. Here are the most common coverage options for business owners in Canada:

Workers’ compensation insurance:

Workers’ compensation coverage is required by law in most provinces and provides benefits to employees who suffer work-related injuries or illnesses. It covers medical expenses and lost wages while protecting employers from lawsuits.

General liability insurance:

This protects against third-party claims of bodily injury or property damage. For example, if a customer slips and falls in your store, this policy can cover legal fees and medical expenses.

Commercial property insurance:

This type of insurance covers damage to physical assets like buildings and equipment due to fire, theft, or natural disasters.

Professional liability insurance:

Also known as errors and omissions (E&O) insurance, this protects against claims of negligence or inadequate work.

Business interruption insurance:

This provides compensation for lost income during periods when business operations are halted due to covered events.

Cyber insurance:

This type of insurance protects businesses against cyber risks like data breaches and cyberattacks, covering costs associated with recovery and legal liabilities.

Who Provides Business Insurance Quotes in Canada

If you’re looking for business insurance quotes in Canada, these four providers can offer them to you based on your specific needs:

Insurance Brokers

Brokers can represent you and your business and get quotes from different providers. They can also give you advice on choosing a policy.

Direct Writers

Direct writers are companies that don’t have independent agents offering their products. Typically, they offer policies through an official site or a call centre.

Insurance Agents

These independent professionals provide quotes and policy information from the companies they work with.

Insurance Aggregators

Online platforms, like MyChoice, allow you to get quotes and compare rates and coverage from different providers.

What is The Best Insurance for a Small Business?

Determining the best insurance for a small business depends on its unique needs and risks. However, essential coverages for most small to mid-sized businesses typically include:

This is a must-have for most businesses as it protects against common risks associated with customer interactions and property damage.

This type of insurance is crucial for service-based businesses like consulting firms or law offices, as it provides coverage for errors that lead to financial losses or reputational damage.

Its coverage for physical assets is key for protection against theft or damage.

This offers coverage for lost or reduced income due to operational downtime caused by unforeseen events.

What Information Do You Need to Get a Business Insurance Quote?

For a business insurance quote, you’ll typically have to submit the following details:

Business details

Include your business name, address, type of business structure (e.g., sole proprietorship, corporation), and industry classification.

Safety measures

If applicable, mention any safety measures or risk management practices you’ve implemented. Having proactive risk management strategies may make you eligible for discounts.

Financial information

Be prepared to share details such as your annual revenue and number of employees, as this information helps insurers assess your risk levels.

Coverage needs

Specify the types of coverage you are interested in when possible. Different insurers may have varying offerings based on your requirements.

Claims history

Disclose any previous claims that your business has made within the last few years. A history of frequent claims can affect your premium rates negatively.

What Factors Affect Your Business Insurance Quote?

Several factors can influence the cost of commercial insurance in Canada. Here’s a quick breakdown of how each one can raise or lower your quotes:

Business size and type:

Larger businesses or those in high-risk industries typically face higher premiums because of increased exposure to potential claims.

Location:

The geographical area where your business operates can impact your business insurance quotes significantly. High-risk areas prone to natural disasters like flooding may incur higher rates due to increased exposure, especially with the increased severity of these disasters in the past few years.

Claims history:

A history of frequent claims can lead to higher premiums as insurers view these businesses as a higher risk to insure.

Industry risks:

Certain industries are inherently riskier than others. For example, construction companies often face higher premiums than office-based businesses due to increased accident potential.

Coverage limits and deductibles:

Higher coverage limits generally lead to higher premiums. Opting for higher deductibles can lower your premium costs but it may increase out-of-pocket expenses during claims.

How to Get Affordable Business Insurance

Careful planning and research are key to finding affordable insurance for your business. Here are some tips to try to get lower quotes:

Implement risk management practices:

Invest in safety training programs and proper equipment to reduce risks associated with workplace accidents. Insurers may offer discounts for proactive measures that minimize risk exposure.

Compare quotes online:

Use platforms like MyChoice to compare multiple quotes quickly. This allows you to find competitive rates tailored to your needs without extensive legwork.

Bundle policies:

Many insurers offer discounts to businesses that bundle different types of coverage together. This can result in significant savings compared to buying policies separately.

Increase your deductible:

Opting for a higher deductible can lower your premium – just ensure you have sufficient funds available if you need to find a claim.

Maintain a good claims history:

While it can be tempting to have your insurance cover any associated costs you incur, filing claims too frequently can dent your premiums in the future. Consider first if the cost is something you can cover with your business’ income or savings. Reducing the number of claims you make over time will help keep your premiums lower – and insurers typically offer better rates to businesses with fewer claims.

Why You Should Compare Business Insurance Rates with MyChoice

Comparing rates through MyChoice offers several advantages:

  • Convenience: You can access multiple quotes from various insurers in one place without having to research too extensively. This saves time while ensuring you find competitive rates for your unique preferences and business needs.
  • Cost savings: Finding the best rate quickly through MyChoice can lead to significant savings on premiums over time. These small differences in rates can add up substantially when considering long-term costs.
  • Tailored options: MyChoice allows you to filter quotes based on your specific needs and budget constraints. This ensures you find the right coverage at an affordable price without sacrificing essential protections.

Commonly Asked Questions About Business Insurance

How much does business insurance cost in Canada?

The cost of business insurance in Canada varies widely based on factors like industry type, location, size of the business, and coverage needs. On average, small businesses may pay between $450 to $1,500 annually for basic coverage.

What does business insurance cover?

Business insurance typically covers risks such as liability claims, property damage, and loss of income due to business interruption. However, specific coverages will depend on the policy chosen.

How can I get business insurance?

Here’s a quick step-by-step guide to getting business insurance:

1. Evaluate your business risks (e.g. bodily injury, food spoilage) and consider different business coverage types.
2. Apply for business insurance quotes through insurance agents, brokers, direct insurers, or insurance aggregators like MyChoice. You may need to submit information such as annual revenue and industry type for an accurate quote.
3. Compare quotes and complete an application from your chosen business insurance provider.
4. Once your application is approved, purchase your policy.

How much is a $2 million dollar insurance policy for a business?

A $2 million dollar insurance policy may cost a small to mid-size business around $450 per year, but this can vary significantly based on risk factors like your insurance claims history, business size, and annual revenue.

How much does small business insurance cost per month in Canada?

Small business insurance costs can range anywhere from $19 for basic coverage options to several hundred dollars per month, depending on the size and nature of the business.

What is the most common type of business insurance?

General liability insurance is the most common type of business insurance as it protects against basic risks faced by most businesses, such as claims or lawsuits.

What is the difference between commercial and personal insurance?

Commercial insurance covers risks associated with running a business, while personal insurance protects individuals against personal liabilities and losses incurred outside a professional context.

What is the best insurance for a small business?

The best insurance for a small business varies by industry, but generally, businesses should look into getting general liability, professional liability, and property insurance tailored to their specific operational risks. Consulting with a business insurance provider can help you identify the best options for your situation.

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