TL;DR
Business insurance costs most Canadian small businesses somewhere from a few hundred to a few thousand dollars a year, but there’s no single price. What you pay is worked out by an insurer from what your business does, how big it is, where it operates and the cover you choose. Here’s what published estimates say, how insurers arrive at your number, what pushes it up or down, and how to compare the quotes you get.
How much does business insurance cost in Canada?
Desjardins, a Canadian insurer, estimates that small business insurance costs roughly $25 to $500 a month, depending mostly on the industry: around $25 to $50 a month for professional services and beauty care businesses, and $60 to $250 a month for construction companies. These are estimates published by insurers, not quotes: what you actually pay is set by the insurer for your business, and Clearly Rate doesn’t set prices.
| Insurer | What it estimates | Published range |
|---|---|---|
| Desjardins (July 2025) | Small business insurance overall | $25 to $500 a month |
| Desjardins | Professional services (legal, accounting, cleaning) and beauty care businesses | About $25 to $50 a month |
| Desjardins | Construction companies | $60 to $250 a month |
| Desjardins | Landlords of multi-unit residential and commercial properties | $150 to $500 a month |
| Square One (undated) | Home business coverage added to its home insurance policy | From $7 a month for one coverage, or from $22 a month for all its home business coverages |
The ranges are wide for good reason. They average many different kinds of businesses, coverages, limits and provinces, and they don’t include sales tax. A home-based bookkeeper and a roofing contractor can both buy general liability insurance, and the roofer’s premium will usually be considerably higher, because roofing work tends to lead to more claims, and bigger ones.
So use the ranges as a rough guide to the order of magnitude, not as a budget. The rest of this guide explains what goes into your own price, which is the part you can understand and, often, influence.
How insurers work out your premium
An insurer usually builds a business insurance premium in the same order, whatever the coverage:
- Your business is put in a class. The insurer classifies what you actually do: a consultant, a café and an electrician are each rated differently. Describe your work accurately, because the class drives everything after it, and a wrong one can cause trouble at claim time.
- It measures your exposure. This is the size of your risk, usually your annual revenue or payroll for liability cover, and the value of your building, equipment and stock for property cover. More revenue, more staff or more property usually means more exposure.
- It applies its rate. The insurer has a rate for your class and location, and applies it to your exposure.
- It adjusts for your business. Your claims history, the limits you choose, your deductible, your years in business and safety measures can all move the price up or down.
- It checks its minimum premium. Many insurers won’t write a policy below a set minimum, so very small businesses often pay that minimum whatever their revenue.
- It adds tax and any fees. In some provinces, a provincial sales tax is added to the premium (see below).
Each insurer has its own classes, rates and minimums, which is why quotes for the same business can differ, and why comparing more than one is worth the time.
What affects the cost of business insurance
These are the factors insurers commonly look at, and what you can do about each one.
| Factor | Why it matters | What you can do |
|---|---|---|
| What your business does | Some work leads to more claims, or bigger ones | Describe your work accurately, including any higher-risk activities |
| Revenue and payroll | They measure how much business you do, and so your exposure | Report them accurately and update them when they change |
| Location | Crime, flooding, weather and local claims costs vary by address | Look after the premises and ask what affects your address |
| Property values | More property to insure costs more to cover | Insure at a realistic value, not an inflated one or a guess |
| Limits | Higher limits mean the insurer could pay more | Check what your leases and contracts require before choosing |
| Deductible | A higher deductible means you pay more of each claim yourself | Choose one you could actually pay |
| Claims history | Past claims suggest future ones | Prevent small losses, and think before claiming for very small ones |
| Years in business | A track record helps the insurer judge the risk | Keep records that show it |
| Safety and security | Alarms, sprinklers and good practices reduce claims | Ask which measures the insurer recognizes |
What drives the price of each type of coverage
Each type of business insurance is priced on different things, so a quote for one tells you little about another.
| Coverage | What the price mostly depends on |
|---|---|
| General liability | Your type of business, your revenue, whether the public comes to you or you work on their property, and your limit |
| Professional liability | Your profession, your revenue, the kind of advice or service you give, your claims history and your limit |
| Commercial property | The value of your building, equipment and stock, how the building is built, fire protection, security and location |
| Business interruption | How much income you’d lose, your fixed costs and how long the policy pays for |
| Cyber insurance | How much customer data you hold, whether you take payments online, your revenue and your security practices |
| Directors and officers | The size of the organization, its finances, who invests in it and your limit |
| Builders risk | The value of the project, how long it takes, the type of construction and the site |
Many small businesses buy several of these together as a package, which can cost less than buying each one separately. Ask whether a package is available for your type of business.
Taxes and other costs on top of the premium
The premium isn’t always the whole bill. Check a quote for these:
- Provincial sales tax. Ontario charges 8% retail sales tax on most business insurance premiums, including liability and property cover, under section 2.1 of the Retail Sales Tax Act (the Ministry of Finance’s guide lists the exceptions, such as compulsory auto insurance and surety bonds). Saskatchewan applies its 6% provincial sales tax to taxable insurance premiums, and Newfoundland and Labrador charges a 15% retail sales tax on insurance premiums. A quote may or may not show the tax, so ask.
- Workers’ compensation. If you have employees, you may have to register with your province’s workers’ compensation board, such as the WSIB in Ontario, and pay its premiums. That’s a separate cost, set by the board, not part of your business insurance.
- Fees. Some insurers or brokers charge a policy fee, and paying monthly can cost more in total than paying the year up front.
How to keep business insurance costs down
You can’t control every factor, but these commonly help:
- Describe your business accurately. A precise description puts you in the right class, and it avoids a dispute if you make a claim.
- Only insure what you need. Check what your leases and contracts actually require, and drop cover you no longer need when your business changes.
- Choose your deductible deliberately. A higher deductible usually lowers the premium, but only choose one you could pay.
- Prevent claims. Clear snow and ice, maintain the premises, secure your equipment, back up your data and train your staff. A clean claims history is one of the few factors you control.
- Ask about a package. Buying liability and property cover together can cost less than separate policies.
- Review your cover every year. Update your revenue, staff and property values, and compare quotes at renewal.
How to compare business insurance quotes
Two quotes are only comparable if they cover the same things. Before you compare prices, line up:
- The same coverages, including any add-ons, such as sewer backup on a property policy
- The same limits, per claim and in total for the year
- The same deductibles
- The exclusions and any sublimits, such as a lower limit for a particular kind of loss
- The retroactive date on claims-made policies such as professional liability, which decides whether work you did before the policy is covered
- Taxes and fees, so you’re comparing the total cost
- Payment terms, monthly or yearly
If something isn’t clear on a quote, ask the insurer or broker to explain it before you buy.
Get a quote: what you’ll be asked
Having these ready makes quotes faster and more accurate:
- What your business does, and roughly what share of your work is in each activity
- Your annual revenue and payroll, and how many employees you have
- Your address, and whether you own or rent your premises
- The value of your building, equipment and stock
- Any limits or certificates your leases or contracts require (see what a certificate of insurance is)
- Your claims history
When you’re ready, tell us about your business and we’ll refer you to licensed insurers who can quote. For an overview of each coverage, see business insurance, and if you’re in Ontario, business insurance in Ontario.
