What is the Best Business Insurance in Canada?

Business owners know that life rarely goes according to plan. That makes business insurance crucial. It is a safety net that protects the financial future of your business!

Paying to recoup any business loss is extremely painful. It can sometimes even be the downfall of the financial health of a business.

Below we cover the basics of business insurance, the different types of business insurance, how much business insurance costs and much more.

Who are the top business insurers in Canada?

There are many great insurance options in Canada, but it can be difficult to navigate all of the suppliers and options. To get you started here are our favourites for small businesses.

Summit Business Insurance

Summit is a transparent business insurance broker with more than 20 years of experience. It works with more than 40 partners including some of Canada’s largest and best-rated insurers. That means that you're in good hands. It covers large and small businesses in Alberta, British Columbia, Saskatchewan, Manitoba and Ontario. Many types of insurance are available through Summit including commercial general, professional liability, commercial property, cyber and builder’s risk insurance.

Zensurance Business Insurance

Zensurance is one of our favourite business insurance brokers for small businesses. Their online tool is intuitive. Quickly explore your insurance options by profession. It makes it easy to get your personalized quote. They partner with more than 50 insurance providers. That means that you get a wide choice and cheap rates. Zensurance helps people find the right policy for their small business

Foxquilt Business Insurance

Foxquilt is a relatively new player to the small business insurance market, but its founders have long experience in the industry. The insuretech’s online platform makes it quick and easy to get a quote online. It underwrites its own products with machine learning. That means great rates for its clients. Coverage options include General Liability, Workers' Compensation Professional Liability/E&O, Business Owner’s Policy, Umbrella/Excess and Inland Marine insurance. Both industry experts and clients give it great reviews.

APOLLO Business Insurance

APOLLO is another insuretech that is simplifying insurance. It empowers small business owners to purchase insurance 100% online, 24 hours a day, 7 days a week. Pick from a wide range of professions and services offered to create a custom quote. Through great data and proprietary algorithms, it’s able to quickly offer you a comprehensive quote on general liability, commercial property, business interruptions, crime insurance and much more.

What is business insurance?

Business insurance, sometimes known as commercial insurance, protects businesses from many threats. It can cover losses, damage to physical property, the loss of your business's ability to operate and generate income and much more.

Business insurance comes in many different forms because every business is different. From humble sole proprietorships to behemoth corporations, businesses need to manage risk. Sometimes things go wrong. Business insurance ensures you are ready when they do.

Business insurance is an umbrella term that encompasses several types of coverage, which we will explore below. In Canada, it starts with commercial general liability insurance and then appropriate add-ons are built on top of that framework.

Losses come in many different forms when you own and operate a business. What would happen if a flood forced you to temporarily shut down? Or if a fire destroyed your inventory? Business insurance lets you protect yourself from threats that would prevent you from operating as normal.

How much is business insurance?

One of our partners starts its business insurance rates at just $19. It quotes an average of $450 per year for $2M in commercial general liability insurance for small and medium-sized businesses in Canada. That works out to less than $40 per month.

How much small business insurance costs depends on your sector, the size of your business, revenue and your risk profile, but it is usually very affordable! Even for the smallest sole proprietorships. Business insurance rates also vary depending on the desired coverage amounts and add-ons. Larger and/or higher-risk businesses may expect to spend a few hundred dollars per month.

The easiest thing to do is to request a business insurance quote and speak with a broker or agent. Every business will be different.

Here are some main factors that business insurers will consider when calculating your quote:

• Size
• Location
• Revenue
• Industry
• Coverage amounts
• Types of coverage (cyber, errors and omissions, etc.)
• Industry experience
• Number of employees
• Claims history

Keep in mind that higher-risk activities correspond with higher business insurance rates. A mining company should expect to pay more than an Uber driver. In turn, that driver will likely pay more than a copywriter who works from home. Insurance rates rise when your industry is more likely to generate a higher claim.

Finally, rates will also vary depending on your location. Small business insurance in Ontario isn’t priced the same as in BC, even for similar companies. It can even change between cities! If you operate your business in Edmonton, Alberta, your premiums may differ greatly from a similar business in Calgary. This is because property values, claims history, weather and crime rates aren't the same.

What does business insurance cover?

Commercial general liability insurance protects businesses from losses caused by unforeseen events. These include many accidents that occur during normal day-to-day business operations, third-party property damage, errors or bodily injuries. For example, imagine a fire breaks out and destroys the building. It could force you to cease operations until the damage is repaired. Or perhaps you are a victim of theft and lose inventory and revenue. Hopefully, your business has never had to experience a devastating loss. However, if you do, business insurance protects you and the business financially.

Many types of business insurance add-ons are available to supplement this basic coverage. Cyber insurance is a good example. It covers hacks that expose sensitive customer data from your servers. Another choice is errors and omissions insurance, which protects against lawsuits accusing you of bad advice or professional negligence.

Exactly what is covered will come down to the terms of your policy, so read them carefully!

Here are some common risks that can be covered by a base general liability policy or add-on:

What types of business insurance exist?

Commercial insurance is an umbrella term that houses many different types of business insurance.

Here are some of the most popular types and how they work

Type of Business Insurance	How it works
Commercial property insurance	Commercial property insurance covers a business’s physical property from weather damage, theft and vandalism. This may include the building itself, equipment, furniture and inventory.
Public liability insurance	Public liability insurance is also known as commercial general liability insurance. It protects your business against third-party property damage and lawsuits for bodily-injury claims (such as a customer who slips and falls at your business).
Key-person insurance	Key-person insurance provides a monetary benefit to the business if a critically important employee dies or is no longer able to work.
Cyber insurance	Protects a business from liability for hacks or data breaches involving sensitive customer information, including health records, banking information or social insurance, credit card, and driver's license numbers.
Professional liability insurance	Professional liability insurance is sometimes also known as malpractice or errors and omissions insurance. It protects professionals like accountants, doctors and architects who sued for negligence, mistakes and omissions that harm their clients or patients.
D&O insurance	Directors and officers insurance is a type of professional liability insurance that covers legal defence fees for directors, officers and board members sued while exercising their role in the business.
Builder's risk insurance	Builder’s Risk insurance is also known as Course of Construction insurance. It is a type of commercial property insurance that covers unfinished construction projects and major renovations.
Commercial auto insurance	Commercial auto insurance works like the car insurance you are used to, but covers you and your employees who use a vehicle in your business (delivery, ride-shares, commercial trucking, etc.)
Malpractice Insurance	Malpractice insurance is a type of professional liability insurance. It protects medical professionals including doctors or nurses from patient claims and lawsuits stemming from including negligence or patient injuries.

These are not the only business insurance options that you will find. Looking for something else? Speak with your insurance broker if you are unsure what offers the most appropriate coverage for your small business.

What business insurance do I need?

Unfortunately, there is no crystal ball to determine when and what kind of losses you could incur. Business insurance is a hedge against potential problems. So what you get depends greatly on your industry, your business and your risk tolerance.

Ultimately, when imagining risks, ask yourself if you could handle them without insurance. If you couldn’t, then it is probably worth getting insurance coverage for it.

As a small business owner, evaluate the risks your business could face and weigh the policies available to protect you. Here are a few steps to take first:

• Inventory risks to your business: Include any vital property, vehicles, equipment or supplies. Consider risks like a data breach or the death of a key employee.
• List potential losses and liabilities: Separate personal and business items. If you are using your home or personal vehicle for your business, be aware that your personal policy will not cover you for damages incurred while performing commercial activities.
• Ask how to reduce your premiums: Your broker can help you weigh risks and lower your premiums. Ask about discounts for purchasing multiple policies or consider steps you can take to reduce your risk profile. Underinsuring your business can be a costly mistake.
• Work with a broker that understands your industry: Business insurance needs differ between industries. A broker with experience in your industry is better equipped to help you select the right policy.

Once you have determined the risks you need to have insured, an expert can help you decide which policies would be best for protecting your business.

Is business insurance mandatory in Canada?

Canadian federal law does not require all business owners to purchase business insurance, but we strongly recommend it.

There's a patchwork of insurance requirements. Check with industry peers, local government, business consultants or a Chamber of Commerce!

To give some examples, restaurants in Canada must carry insurance. Accountants in some provinces are required to have professional liability insurance. Similarly, drivers are required to insure their vehicles, so you will need a business auto insurance policy for your work truck.

Even when not required, business insurance is a good idea! It can protect you if a client makes a claim against you or you are the defendant in a lawsuit. Carefully consider your risk and the nature of your business.

What types of companies should buy business insurance?

It is possible for small businesses to purchase coverage regardless of their industry. Experts strongly recommend comprehensive policies for companies that work with people and those who are particularly at risk for malpractice or negligence claims like architects, medical professionals, engineers and more.

Here are a few professions and companies that should consider getting insurance:

Any business that hosts events, either regularly or occasionally, can purchase event insurance too. This may include wedding planners, event halls, sports instructors or offices.

How do I buy business insurance?

Buying business insurance has never been easier. Traditionally, you would have to speak to a broker or agent. It would take time to evaluate your needs, risk profile and what makes your company unique. No more! Entrepreneurs today can take advantage of a new wave of online insurance brokers who can offer quotes online in just a few minutes. These include providers like:

• Foxquilt
• Zensurance
• Summit
• APOLLO

In many cases, you can get your insurance quote and purchase a personalized policy in just minutes.

What is business interruption insurance?

Business interruption insurance pays out if you are unable to make money after an unexpected event like a natural disaster or accident.

Besides reimbursing you for lost income, business interruption insurance can cover many fixed expenses. These include:

• Taxes
• Wages
• Bills
• Loans
• Leases and mortgage payments

Some policies will also cover temporary moves, repairs and relocation.

Let's explore this more.

Knowing that you have comprehensive coverage takes some stress off of you as you rebuild. It supports you until you can become operational again and can make the difference between a business surviving a hardship or not.

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