What is the Best Small Business Insurance for 2024?
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Did you know that small businesses are the most likely to close their doors due to unexpected events? Small business insurance can be one of your most valuable investments, saving you from closure or bankruptcy.
This guide will explain the importance of small business insurance, what it covers, and the types of coverage available. We'll also answer common questions like what kinds of small business insurance are required and whether home-based businesses need insurance.
Small business insurance key takeaways
- Small business insurance is crucial to protect against losses caused by unexpected events that might cause you to go bankrupt or close down.
- There are over ten types of small business insurance, all with rates and coverage tailored to your company.
- Insurance can help small businesses meet legal requirements and comply with regulations.
- Small business insurance can protect personal income for those who use their home or assets as equity for their business.
- Using our comparison tool will ensure you get fantastic rates and coverage for your small business in Canada.
Top 5 best small business insurers in Canada
Summit Business Insurance
Summit is a transparent business insurance broker with more than 20 years of experience. It works with more than 40 of the largest and best-rated insurers in Canada. That means that you are in good hands. It covers large and small businesses in Alberta, British Columbia, Saskatchewan, Manitoba and Ontario. Summit sells many types of insurance including commercial general, professional liability, commercial property, cyber and builder’s risk insurance. Get customized coverage that is right for you.
Here is why we like Summit:
- Responsive
- Good value for money
- Customized coverage for your needs
- Hands-on service from a small, dedicated team
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 leading insurance providers. That means that you get a wide choice and cheap rates. Zensurance helps people find the right policy for their small businesses.
Here is why we like Zensurance:
- Easy to buy online and compare rates
- Transparent and easy-to-understand insurance explications
- 24/7 online service
Foxquilt Business Insurance
Foxquilt is a relatively new player in 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 competitive rates for its clients. Coverage options include General Liability, Professional Liability/E&O, Umbrella/Excess, Inland Marine insurance and more. Both industry experts and clients give it great reviews.
Here is why we like Foxquilt:
- Designed specifically for small to medium-sized businesses and sole proprietors.
- Purchase online 24/7
- A comprehensive set of business insurance products that covers almost anything.
APOLLO Business Insurance
APOLLO business insurance is another insuretech that is simplifying coverage. It empowers small business owners to purchase insurance 100% online and 24/ 7. Pick from a range of business types to create a custom quote. Through great data and proprietary algorithms, it is able to quickly offer comprehensive quotes for general liability, commercial property, business interruptions, crime insurance and much more.
Here is why we like APOLLO:
- Buy business insurance online 24/7
- Proof of insurance in just minutes
- Industry-specific coverage for all kinds of businesses
TruShield Business Insurance
TruShield knows that Canadian entrepreneurs have too much on their plates. That's why they make it easy to get an online business insurance quote in minutes. Plans start at just $50 per month. Coverage types include CGL, commercial property, professional liability and cyber risk insurance and more.
Build a unique plan that's right for you and your business. Get discounts you will use with Stapels, TELUS Business and QuickBooks.
What we like about TruShield:
- 24/7 claims
- Customizable policies
- Discounts with partners
- Financial stability
What is small business insurance?
Running a small business can be risky, especially when unexpected events happen. Small business insurance is a type of policy that can help protect your company from big losses that might cause you to go bankrupt or close down.
There are ten types of small business insurance that we will help you navigate in this article. Each insurer adds a level of personalization to the policy that affects your rates. This is because your location, risk, type of work, and company size will be factored into your policy to find your premium (the rate you pay per month).
No matter what factors affect your insurance costs, comparing different insurance plans is essential to getting the best deal and coverage for you. Our tool can help you find the right commercial insurance policy for your small company.
Why is insurance important for a small business?
Small business insurance in Canada is crafted to protect small ventures from unforeseen events that can have crippling effects.
If you're an entrepreneur, the common reasons below will highlight just how impactful insurance can be:
- Protection from financial loss: Unexpected events like theft, property damage, or liability claims can significantly impact a small business. Insurance can help the business recover from these losses and mitigate the risk by providing loss coverage and protecting business assets.
- Legal compliance: Depending on the nature of the business, certain types of insurance may be required by law, mainly if the company employs staff or operates in a high-risk industry. The right insurance can help small businesses meet legal requirements and comply with regulations.
- Enhanced credibility: Insurance coverage can build trust and credibility with customers and partners. It demonstrates that the business is taking necessary steps to protect everyone involved and that physical and financial safety is a top priority.
- Peace of mind: You can relax knowing that your small business has insurance to protect it from interruptions, financial loss, or potential closure, meaning you can focus on running your business instead of potential risks.
Do small business owners need insurance?
Small businesses are statistically the most likely to face closure due to unforeseen issues such as:
- Property theft
- Liability claims
- Water or fire damage
- Natural disasters
Investing in commercial insurance protects your business but also your personal income. Self-employed Canadians who use their home or other assets as security for their business can find peace of mind in knowing that insurance can be the difference between saving their career and lifestyle or losing it all. Working with an insurance broker to tap into the insurance best suited to your industry and services is always a great idea.
Good to know
You can protect your small business, regardless of its size or location. Whether you operate from home as a photographer or consultant or work as an independent contractor or beauty consultant, small business insurance is available to safeguard your livelihood.
Is small business insurance mandatory in Canada?
In Canada, it is mandatory for some small businesses to be insured. Depending on your small business and its inner workings, the following circumstances are some that legally require insurance:
Workers' compensation insurance: Do you employ others? If so, it is required by law to have insurance for workers' compensation for work-related illnesses or injuries.
Professional liability insurance: Depending on the province and your profession (lawyers, engineers, architects, land surveyors, and healthcare professionals) are legally required to be insured against claims of negligence, errors, and omissions.
Auto insurance: It's legally required across the country to have adequate insurance for any vehicle used for commercial purposes by you or any of your staff.
Working with one of our partners for your small business insurance will give you a tailored service that considers your best legal and operation interests.
Better protection for your business today
For home-based businesses providing virtual services, do I need small business insurance?
Many entrepreneurs operating from their homes online assume they don't need business insurance. If you're working virtually, risks and potential liabilities are still associated with running a business that should be covered by small business insurance.
Some examples of insurance coverage that may be relevant for your home-based business:
Liability insurance: If your business activities have accidentally caused injury or property damage (virtually or not), liability insurance can offer protection from legal action.
Professional liability insurance: If you offer professional services such as a healthcare provider, lawyer, or architect, you will be covered if a client claims your work has caused injury or financial loss. This type is also referred to sometimes as errors and omissions insurance.
Cyber liability insurance: Protecting your staff and clients' data is essential. You can rest easy knowing your business is protected if a data breach or cyber attack.
Business interruption insurance: If your business is affected due to flooding, storms, earthquakes or fire. Business interruption insurance can cover limited losses during the closure.
What does small business insurance cover?
Don't let unexpected risks and liabilities put your business in jeopardy! With small business insurance, you can have peace of mind knowing you're covered in any unforeseen events. Check out these examples of what small business insurance can protect you from:
| Insurance | Coverage | Use Case |
|---|---|---|
| General Liability Insurance | Bodily injury, property damage, and personal injury from your business operations. | If a customer falls in your store and sues you for their injuries, general liability insurance can cover the costs of medical bills and legal fees. |
| Property Insurance | Damage to your property, such as office space, equipment, and inventory, due to fire, theft or vandalism. | Your office is damaged in a fire, property insurance can cover the costs of repairs and replacement equipment. |
| Professional Liability (Errors and Omissions) Insurance | If a client claims your work caused financial loss or damage. | You're a consultant and a client claims that your advice caused them financial loss, professional liability insurance can help cover the costs of legal fees and any damages awarded. |
| Cyber Liability Insurance | A data breach, cyber attack, or other cyber-related incident. | Cyber liability insurance can help cover the costs of notifying customers, providing credit monitoring, and any legal fees or damages awarded if sensitive customer information has been compromised. |
| Commercial Auto Insurance | Vehicles used for business purposes, such as deliveries or transporting equipment. | If one of your vehicles is involved in an accident, commercial auto insurance can help cover the costs of repairs and any damages awarded. |
| Directors' and Officers' Liability Insurance | Claims made against directors and officers of the company for wrongful acts or omissions committed in the scope of their duties. | A shareholder sues the board of directors for mismanagement of company funds. Directors' and Officers' Liability insurance covers legal fees and damages. |
| Business interruption Insurance | Lost income and expenses if business is disrupted due to a natural disaster or other unexpected incident. | If a flood causes your business to close for several weeks, business interruption insurance can help cover lost income, rent and utilities. |
| Umbrella Liability Insurance | Coverage beyond the limits of your other policies. | A customer sues your business, the damages awarded is higher than your general liability insurance covers. Umbrella liability insurance can provide additional coverage to cover the costs. |
| Employment Practices Liability Insurance | Claims of unlawful employment practices, such as discrimination, harassment, or wrongful termination. | An employee sues your business for wrongful termination, employment practices liability insurance can cover the costs of legal fees and any damages. |
| Workers’ Compensation Insurance | Work-related injuries or illnesses of your employees. | Your employee is injured at work and is forced to take time off. Workers' compensation insurance can cover medical expenses and lost wages. |
Good to know
You can hold more than one insurance policy for your small business in Canada.
What type of small business insurance do I need?
Every small business is different, so your insurance requirements will be too. Your industry, location, and size will determine what type of small business insurance is best for you.
Using our top 5 best small business insurers can give you peace of mind that your business will be assessed for the perfect coverage and rates.
How much does small business insurance cost Canada?
The cost of small business insurance will depend on various factors specific to your registered business and the coverage you decide to move forward with.
Insurance companies will look at:
- Your annual income. The more you sell, the higher the chance of causing damage to third-party property.
- Your industry. Some industries are much riskier than others.
- Your office location. High-crime or high-risk weather areas can increase your insurance cost.
- Your claims history. Having no claims (or a low amount) is beneficial.
Generally, small businesses can expect to pay anywhere from $500 to $5,000 per year for insurance, depending on the type of business and its risk factors.
Many insurance companies also have bundled plans, allowing you to get multiple types of coverage at a more economical cost than purchasing the policies separately.
For example
The risks are low if you make vases from home and sell them online. If you decide to open a store, the risks increase, and you may have to pay more for insurance.
How do I buy small business insurance?
Ready to get small business insurance in Canada? Here are some ways to do it:
- Contact an insurance company for a quote. Many insurers have websites that make it easy to determine the right coverage for you.
- An insurance broker is a licensed professional aimed at giving expert advice on plans from various insurers. By contacting them, and can answer any queries you have.
- Use our comparison tool to get the best small business insurance in Canada. Our partners ensure you get the best coverage for you without the ambiguity of what is or isn't covered.
