Business Insurance in Canada: Compare Coverage and Get a Quote
Business insurance protects your company from the cost of things going wrong: a customer is injured, a client says your work cost them money, a fire shuts you down, a breach exposes customer data. In Canada it’s also called commercial insurance, and it’s usually a set of policies rather than a single one.
What is business insurance?
Business insurance, also called commercial insurance, is a set of policies that pay for financial losses a business faces from things like customer injuries, property damage, professional mistakes, lawsuits and interruptions to operations. Each policy covers a different risk, so most businesses combine two or three.
Your home or car policy won’t usually cover business activity. A business policy has a few parts worth knowing before you compare options.
Types of business insurance in Canada
These are the main types small businesses come across. Which ones apply to you depends on what you do, where you work and who you work for.
- Protects against
- Injury or property damage you cause to others
- Commonly needed by
- Most businesses that deal with the public or work on others' property
- Protects against
- Claims that your advice or service cost a client money
- Commonly needed by
- Consultants, designers, IT and licensed professionals
- Protects against
- Damage to or loss of your equipment, inventory and premises
- Commonly needed by
- Businesses with equipment, stock or a location
- Protects against
- Lost income when a covered event forces you to close
- Commonly needed by
- Businesses that depend on a location or equipment
- Protects against
- Claims about how a company was managed
- Commonly needed by
- Incorporated businesses with a board or outside investors
- Protects against
- Costs after a data breach or cyberattack
- Commonly needed by
- Businesses that hold customer data or take payments online
For a specific project
Some cover applies to a particular kind of work, not to every business.
- Protects against
- Damage to a building and its materials while it's being built or renovated
- Commonly needed by
- Owners, developers and contractors with a build or major renovation
How much does business insurance cost in Canada?
There isn’t one price. What you pay depends on several things about your business and the cover you choose. The only reliable number is a quote for your own business, and Clearly Rate doesn’t set prices. The insurer does.
What affects the price
- Your industry and the work you do
- Annual revenue
- Number of employees
- Where you operate
- Your claims history
- The limits and deductible you choose
How to keep your premium down
Give accurate revenue and operations details, since mistakes can cause problems later at claim time. Ask what a higher deductible would save, and whether you’re comfortable paying that amount yourself. Ask whether combining coverages into one policy is available. Review your coverage each year as your business changes.
Is business insurance required in Canada?
For most businesses, no law says you must buy general business insurance. In practice, though, you’re often required to have it.
| Situation | What’s usually required |
|---|---|
| You lease commercial space | The landlord typically requires liability coverage, and sometimes property coverage |
| You sign contracts with clients | Clients often set a minimum liability limit, commonly $1 to $2 million |
| You work in a regulated profession | A regulator or professional association may require professional liability |
| You have employees | Workers’ compensation through your provincial board, such as WSIB in Ontario, is mandatory for many employers |
Workers’ compensation is run by provincial boards, not sold by private insurers. Check with your board on whether it applies to you.
What insurance does my type of business need?
This shows what businesses of each type commonly consider. It’s general information, not advice about what you should buy.
| Business type | Commonly considered | Worth knowing |
|---|---|---|
| Construction and contractors | General liability, professional liability if you design or advise, property and equipment cover, builders risk for specific projects | Clients and general contractors often ask for proof of insurance before you start |
| Consultants and professional services | Professional liability, general liability if clients visit you, cyber | A mistake in your work is the main risk, not injuries |
| Retail | General liability, commercial property, business interruption, cyber | Inventory and card payments raise the stakes on property and cyber |
| Restaurants and food service | General liability, commercial property, business interruption | A closure after a fire or similar event can cost more than the damage |
| Home-based businesses and sole proprietors | General liability, professional liability if you sell services, property for equipment | Home insurance usually excludes business activity, and sole proprietors face the same exposure as larger firms |
How to get business insurance
It helps to have ready: a realistic estimate of your yearly revenue, your number of employees, a clear description of what you do, any policies you already hold, and any insurance requirements in your leases or contracts.
What business insurance doesn’t cover
Policies differ, so read the exclusions before you buy. Common ones include:
- Intentional acts, fraud and criminal acts
- Normal wear and tear and lack of maintenance
- Injuries to your own employees, which are handled through workers’ compensation rather than liability insurance
- Professional errors under a general liability policy, and injury or property damage under a professional liability policy, because each covers a different risk
- Data breaches under professional liability, which usually needs a separate cyber policy
- Flood and earthquake, which are often excluded from standard property policies or available only as add-ons
- Business closures that don’t result from covered physical damage, such as those caused by a pandemic, unless a policy specifically includes them
Business insurance FAQs
What is the best insurance for a small business?
How much does $2 million in liability insurance cost?
Does business insurance cover independent contractors?
Can I use my home insurance for a home-based business?
What's the difference between general liability and professional liability?
What's the cheapest business insurance in Canada?
Ready to compare?
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