How Much Does Small Business Insurance Cost? Get Free Quotes

Small business insurance costs typically between $40 and $75 a month in Canada. This cost varies depending on the coverage types you choose, like general liability, commercial property, cyber and privacy liability, and more.

For a more comprehensive business insurance that covers all areas, you might pay around $450 a month. But how does it work?

In this guide, we explain how much small business insurance costs and how it's calculated— based on the type of coverage, and industry, and also tips to lower your premiums.

What does small business insurance cost?

On average, small business insurance in Canada costs between $40 and $75 per month, depending on the type of coverage and business specifics. The table below provides a breakdown of common insurance types and their associated costs.

Insurance Category	Cost (Per Month)	Coverage
General Liability Insurance	$30 to $65	Covers third-party bodily injury, property damage, and legal fees.
Commercial Property Insurance	$25 to $75	Covers damage to buildings, equipment, and inventory from fire, theft, etc.
Professional Liability Insurance (E&O)	$50 to $100	Covers legal costs for negligence, errors, or omissions in professional services.
Product Liability Insurance	$25 to $50	Covers claims related to product defects causing injury or damage.
Cyber Liability Insurance	$20 to $50	Covers costs of data breaches, cyberattacks, and data protection.
Workers' Compensation	Varies ($0.95 to $3 per $100 payroll)	Covers medical costs and lost wages for employees injured at work.
Business Owners Policy (BOP)	$55 to $90	Bundles general liability and commercial property insurance into one policy.

If you want to explore small business insurance options, you can use our free tool below. Compare multiple free quotes online based on the unique needs of your business.

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How is small business insurance cost calculated?

The average small business insurance cost in Canada varies depending on a vast array of factors. These include, but aren’t limited to:

• Industry
• Company size
• Type of business insurance needed
• Revenue
• Claim history
• Location (Small business insurance Ontario costs are typically higher than BC or Alberta)
• Risk management practices

Different Small Business Insurance Costs

Here is the average cost of small business insurance for different coverage types.

Type of Insurance	Brief Description of Coverage	Average Cost Per Month (CAD)	Average Cost Per Year (CAD)
Small Business General Liability Insurance Cost	Covers third-party bodily injury Covers property damage Legal fees if your business is sued	$30 to $65	$360 to $780
Commercial Property Insurance	Covers damage to buildings, equipment Inventory loss due to fire, theft, or other perils	$25 to $75	$300 to $900
Professional Liability Insurance (E&O)	Covers legal costs for negligence Errors or omissions in professional services	$50 to $100	$600 to $1,200
Product Liability Insurance	Covers claims related to product defects Injury or damage caused by your products	$25 to $50	$300 to $600
Cyber Liability Insurance	Covers costs from data breaches Cyberattacks and loss of customer information	$20 to $50	$240 to $600
Workers' Compensation	Covers medical costs and lost wages For employees injured on the job	Varies ($0.95 to $3 per $100 payroll)	Varies based on payroll
Business Owners Policy (BOP)	Bundles general liability and property insurance Often at a lower cost than buying separately	$55 to $90	$660 to $1,080

Here’s a more detailed explanation of each type of small business insurance, including specific examples and the reasons why it’s important for your business:

General Liability Insurance

General liability insurance is designed to protect your business from claims related to accidents, injuries, or property damage caused to third parties. It covers legal fees, medical expenses, and damages if someone is hurt or their property is damaged due to your business operations.

• Coverage Details:
  • Protects your business from third-party claims of bodily injury, property damage, and legal defense costs.
  • Covers incidents like a customer slipping and falling in your store or damage to a client’s property while on your premises.
  • Provides legal defense if someone sues your business, even if the claim is frivolous.
• Examples:
  • A customer trips and falls in your store, breaking an arm. General liability insurance would cover their medical costs and any potential legal fees if they sue.
  • Your employee accidentally damages a client's expensive equipment during a site visit. This insurance would cover the repair or replacement costs.
• Why It’s Important: General liability insurance is essential for almost any business, as it protects you from accidents and unforeseen incidents that could lead to expensive lawsuits or settlements.

Commercial Property Insurance

Commercial property insurance provides coverage for the physical assets your business owns, such as buildings, equipment, and inventory. This insurance protects you from financial losses due to events like fire, theft, or vandalism that could damage or destroy your business property.

• Coverage Details:
  • Covers physical assets owned by the business, such as the building, furniture, equipment, and inventory, against risks like fire, theft, vandalism, and certain natural disasters.
  • Can also include coverage for lost income if your business is forced to close due to property damage.
  • Add-ons are available for specific needs like business interruption coverage, equipment breakdown, or flood insurance.
• Examples:
  • A fire breaks out in your office, destroying computers, office furniture, and essential documents. Commercial property insurance would cover the cost of replacing these items.
  • Your business's inventory is stolen during a break-in. This insurance helps replace the lost goods and repairs any damage from the break-in.
• Why It’s Important: For businesses with physical locations or valuable equipment and inventory, property insurance protects against financial loss from damage or destruction of assets.

Professional Liability Insurance (Errors & Omissions)

Professional liability insurance, also known as errors and omissions insurance, protects businesses that provide professional services or advice. It covers legal costs and damages if a client claims that your advice or services caused them financial harm due to mistakes, negligence, or failure to deliver.

• Coverage Details:
  • Covers businesses that offer professional services or advice. This insurance protects against claims of negligence, mistakes, or omissions in the work you provide.
  • It also covers legal defense costs if you’re sued, as well as any settlements or damages you’re liable for.
• Examples:
  • A client sues a web design agency for missing deadlines that caused them to lose business. Professional liability insurance would cover legal fees and any settlement costs.
  • An accountant makes a mistake in filing a client’s taxes, leading to fines for the client. The client sues, and this insurance helps cover the costs.
• Why It’s Important: If your business provides specialized services or advice (e.g., consulting, legal, accounting, design), you’re at risk of being sued for errors or omissions. Professional liability insurance helps protect against these financial risks.

Product Liability Insurance

Product liability insurance covers businesses that manufacture, sell, or distribute products, protecting them from claims of injury or property damage caused by defective products. It helps pay for legal fees and settlements if your product harms a customer or damages their property.

• Coverage Details:
  • Protects businesses that manufacture, distribute, or sell products. It covers claims related to product defects that cause bodily injury or property damage.
  • Includes coverage for the cost of recalls, legal defense, and any settlements or judgments.
• Examples:
  • A customer sues after being injured by a defective product that your business sold. Product liability insurance would cover medical expenses, legal fees, and any settlements.
  • A faulty electrical appliance manufactured by your business causes a fire in a customer’s home, damaging their property. This insurance covers repair costs and potential lawsuits.
• Why It’s Important: Businesses involved in the production or sale of physical products are exposed to claims of injury or damage from defective products. Product liability insurance helps cover the financial risks associated with such claims.

Cyber Liability Insurance

Cyber liability insurance provides financial protection against losses due to cyberattacks, data breaches, and the loss of sensitive customer information. As businesses increasingly rely on digital operations, this insurance helps cover legal costs, recovery efforts, and customer notification in the event of a cyber incident.

• Coverage Details:
  • Protects businesses from the financial consequences of cyberattacks, data breaches, and loss of sensitive customer information.
  • Covers costs such as legal fees, public relations efforts, notification to affected customers, and data recovery.
  • May also cover ransomware attacks and the cost of restoring systems after a cyber event.
• Examples:
  • A hacker steals customer credit card information from your online store. Cyber liability insurance covers the costs of notifying customers, legal fees, and credit monitoring services.
  • Your business is hit by ransomware, and the hacker demands payment to restore access to your data. This insurance helps cover the costs of dealing with the breach.
• Why It’s Important: With the growing threat of cybercrime, cyber liability insurance is critical for businesses that store customer data or conduct transactions online. It helps mitigate the financial impact of data breaches and cyberattacks.

Workers' Compensation Insurance

Workers' compensation insurance provides wage replacement and medical benefits to employees who are injured or become ill due to work-related activities. It is often required by law and protects both the business and employees by covering medical expenses and lost wages in the event of a workplace injury.

• Coverage Details:
  • Provides wage replacement and medical benefits to employees who are injured or become ill due to work-related activities.
  • Covers medical treatment, rehabilitation, and lost wages while the employee recovers.
  • In most provinces, workers' compensation is mandatory for businesses with employees.
• Examples:
  • An employee injures their back while lifting heavy materials on the job. Workers' compensation covers their medical bills and provides wage replacement during recovery.
  • A construction worker is injured on-site and requires surgery. Workers' comp covers the cost of the surgery and rehabilitation.
• Why It’s Important: Workers' compensation protects both your employees and your business by providing financial support to workers injured on the job while reducing the risk of lawsuits from employees.

Business Owners Policy (BOP)

A Business Owners Policy (BOP) bundles key coverages like general liability and commercial property insurance into one convenient package. It’s a cost-effective way for small businesses to protect against a range of risks, offering comprehensive coverage at a lower rate than purchasing individual policies.

• Coverage Details:
  • Bundles general liability, property insurance, and often business interruption insurance into one comprehensive policy.
  • Provides coverage for third-party claims, damage to business property, and loss of income if the business must close due to a covered event.
  • Typically available at a lower cost than purchasing each policy individually.
• Examples:
  • A storm damages your office building, forcing you to close for repairs. A BOP covers the property damage and lost income during the closure.
  • A client sues after being injured at your store, and you need to repair the damage to your building from the incident. A BOP covers both the liability and property damage.
• Why It’s Important: A BOP provides comprehensive coverage in one package, making it a cost-effective option for small businesses that need protection against a range of risks.

How to reduce small business insurance costs in Canada?

Want to lower your small business insurance costs in Canada? Here are some simple ways to save:

• Shop around for quotes: Don’t settle for the first offer. Comparing quotes from different providers can help you find better rates tailored to your business.
• Bundle your policies: Combine policies like general liability and property insurance. Insurers often offer discounts when you bundle multiple coverages.
• Raise your deductible: A higher deductible means lower monthly premiums. Just make sure you can afford the deductible if you need to file a claim.
• Improve safety measures: Adding things like security cameras, alarm systems, or fire extinguishers can lower your risk, which might reduce your insurance premiums.
• Keep your claims history clean: Avoid making unnecessary claims. A clean claims history shows insurers you’re less of a risk, which can lead to lower premiums.
• Review your coverage regularly: Check your policies at least once a year to remove any coverage you no longer need or to update them if your business has changed.
• Consult with a broker: A broker can help you navigate the best options and find deals or discounts that you might miss on your own.

Best Small Business Insurance in Canada

Due to the vast differences in need, it is nearly impossible to specifically state who the best small business insurance provider is in Canada. One insurer that offers suitable errors and omissions cover for one company may not be able to offer suitable general liability for another. For example, a 2-man lawn care business will have significantly different needs to a pharmaceutical company.

However, finding a great business insurance provider and plan doesn't have to be daunting or hopeless. Canada has numerous incredible insurance brokers who are able to assist any business, small or large, find the insurance they need.

Not only is an insurance broker's expertise vital, they will also be able to provide accurate business insurance costs based on specific circumstances and help with ongoing administrative support after purchase.

Some of the best small business insurance brokers in Canada include:

• Zensurance Business Insurance
• Summit
• Foxquilt Business Insurance

How does a broker affect small business insurance costs?

An insurance broker does not affect business insurance costs. Insurance premiums will always be the same regardless of whether you purchase the insurance directly from the insurer, or go through a broker.

However, a business insurance broker can help a company save money by ensuring that only relevant business insurance is purchased which helps avoid overinsurance and paying unnecessary premiums. Business insurance can be incredibly complex and it is easy for a layman to buy the wrong kind of cover, especially when everything can now be purchased online.

Compare the benefits of some of Canada’s most trusted small business insurance brokers using our free tool below.

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Do I need small business insurance?

Due to rising business costs, it may be easy to consider forgoing business insurance coverage. However, even a minor incident can result in significant financial repercussions which could cause your business to suffer.

For example, if you operate a lawn care business, a stray stone slung from your lawn mower could damage private property and leaving you liable for repairs. Or if you run a beauty salon, a client could have an adverse reaction to your products causing personal harm.

The good news is that small business insurance costs don’t have to break the bank and with the right plan you could be insured for just a couple hundred dollars a year.

Ultimately, business insurance is beneficial due to providing:

• Peace of Mind: Small business or large, insurance will provide you with the peace of mind of knowing that you are protected, leaving you to focus your efforts on running your business.
• Financial Protection: Whether an expensive lawsuit arises or you simply have to compensate a third party for damages caused, business insurance will provide your company with financial aid leaving your bottom line intact.
• Contractual Obligations: Numerous industries require business insurance to fulfill contractual obligations. Keeping your insurance up to date will allow you to quickly take on new projects without having to deal with administrative tasks.

FAQs on Small Business Insurance Costs in Canada

What does Small Business Liability Insurance Cost in Canada?

Small business liability insurance in Canada typically costs between $30 and $65 per month, or $360 to $780 per year. The exact liability insurance cost for small business depends on factors such as the size of your business, industry risks, and your claims history. Discounts may be available if you bundle liability insurance with other policies like property insurance.

Is there a small business insurance cost calculator?

Platforms like Zensurance, Foxquilt, and APOLLO Insurance offer small business insurance cost calculators, allowing you to input your business details and get an instant estimate. These tools consider factors like industry, business size, and coverage needs. It's a quick way to compare costs and options online. You can also use our free HelloSafe tool at the end of this page to calculate the cost of insurance for small businesses.

What does small business insurance in Ontario cost?

The cost of liability insurance for small business in Ontario might range from $40 to $75 per month, whereas in BC, it could be $30 to $65 per month. Ontario, being more urbanized with a higher concentration of businesses in cities like Toronto, tends to have higher premiums due to increased risks, such as higher property values and more exposure to liability claims.

What does small business insurance in Alberta cost?

The cost of small business insurance in Alberta typically ranges from $35 to $70 per month or $420 to $840 per year, depending on factors such as the industry, business size, and location.

For general liability insurance, Alberta businesses usually pay around $35 to $65 per month, while commercial property insurance costs can range from $30 to $75 per month, with higher premiums often seen in urban areas like Calgary and Edmonton. Overall, insurance costs in Alberta are influenced by the specific risks and coverage needs of each business.

Wondering how much small business insurance will cost for your specific needs? Use our free tool to easily calculate and compare personalized small business insurance quotes online. Get customized coverage options and find the best rates, all at no cost to you.

Better protection for your business today

Compare business insurance now