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.

Written by

Beatriz Alban Cabaco

Content Researcher

Reviewed by

Sean Nolan

10 years in insurance

Last updated

October 24, 2026

Key points

Business insurance is usually a set of policies. Most small businesses start with general liability and add professional liability, property or cyber cover depending on what they do.
No law requires most businesses to buy it, but leases, client contracts and some regulators do. Workers’ compensation is separate and run by your province.
The price depends on your work, revenue, location, claims history and the limits you choose. Only a quote for your business gives a real number.
Home and car insurance usually don’t cover business activity, even for a business run from home.

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.

Coverage

What the policy protects against.

Limit

The most it will pay for a claim.

Deductible

What you pay first.

Premium

What you pay for the policy, usually yearly.

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.

General liability

Also called commercial general liability. A customer slips in your shop, or your crew damages a client’s floor: this is the cover that responds, and it typically also pays legal defence costs. It usually includes product liability too, for injury or damage caused by something you make or sell. It’s what commercial leases and client contracts ask for first, so it’s where most businesses start.

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

Commercial general liability insurance

Professional liability

Also called errors and omissions (E&O) insurance. Even a claim without merit costs money to defend, and this coverage is built to pay for that. It doesn’t cover bodily injury or property damage, which falls under general liability.

Protects against: Claims that your advice or service cost a client money
Commonly needed by: Consultants, designers, IT and licensed professionals

Professional liability insurance

Commercial property

Covers physical assets such as equipment, inventory, signage and improvements to a space, from causes like fire, theft or vandalism. If you rent, the building itself is usually your landlord’s to insure, while your contents and improvements are yours.

Protects against: Damage to or loss of your equipment, inventory and premises
Commonly needed by: Businesses with equipment, stock or a location

Commercial property insurance

Business interruption

Helps cover ongoing expenses like rent and payroll while you’re closed. It usually depends on there being physical damage that your property policy covers, such as a fire.

Protects against: Lost income when a covered event forces you to close
Commonly needed by: Businesses that depend on a location or equipment

Business interruption insurance

Directors and officers

Covers the people who run an organization when someone alleges mismanagement: investors, employees or regulators, for example. A sole proprietor usually doesn’t need it.

Protects against: Claims about how a company was managed
Commonly needed by: Incorporated businesses with a board or outside investors

Directors and officers insurance

Cyber

Depending on the policy, it can pay for notifying customers, restoring systems and legal costs. Professional liability generally doesn’t cover a breach, so cyber is usually a separate policy.

Protects against: Costs after a data breach or cyberattack
Commonly needed by: Businesses that hold customer data or take payments online

Cyber insurance

For a specific project

Some cover applies to a particular kind of work, not to every business.

Builders risk

Also called course of construction (COC) insurance. It’s property cover for a project that isn’t finished yet, and it usually ends when the work does. It doesn’t cover injury or damage to others, which falls under general liability.

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

Builders risk insurance

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. Our guide to how much business insurance costs explains how insurers work out a premium.

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 and territorial boards, not sold by private insurers. Check with your board on whether it applies to you.

In Ontario, see business insurance in Ontario for what the WSIB, regulators, leases and contracts may require.

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
Personal care and beauty (hair, esthetics, grooming)	General liability, professional liability for the services you provide, property for equipment	Treatments carry a risk of injury claims, and many salons and spas rent their space
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

Insurance for a home-based business

A home insurance policy is built to protect your home and belongings, not a business you run from it. It usually gives only a small limit for business equipment and stock, and it typically doesn’t cover business liability, such as a client hurt at your door or a claim about your work. Working remotely for an employer is different: that’s not running a business, and your employer’s insurance may cover its own equipment.

If you run your own business from home, there are usually two routes:

A home-based business endorsement added to your home, condo or tenant policy. It’s often enough for small, low-risk operations with few visitors, and it can raise the limit for business equipment and add some liability cover.
A separate business policy, such as general liability, professional liability and property cover. This usually fits when clients visit, you hold stock, you give professional advice, or a contract asks for proof of insurance.

Tell your home insurer about the business either way, and ask what is and isn’t covered. For sole proprietors, see sole proprietor insurance in Canada.

Other coverage you may hear about

Brokers and insurers often offer these alongside the main types, as add-ons or separate policies. Whether you need them depends on your business.

Umbrella liability: extra liability limits above your general liability policy.
Equipment breakdown: mechanical or electrical breakdown of equipment, which standard property policies often exclude.
Crime: theft, fraud or forgery, including by employees.
Tools and equipment floater: tools and portable equipment wherever they are, on a job site or in transit.
Sewer backup and overland water: water damage that standard property policies often exclude or limit, usually available as add-ons.
Employment practices liability: claims from employees about things like wrongful dismissal, discrimination or harassment.
Legal expense: some legal costs for disputes, such as contract or employment disputes, depending on the policy.
Surety bonds: a guarantee to a client or project owner that you’ll meet your obligations, common in construction. A bond protects them, not you.
Commercial auto: if you use a vehicle for work, ask your auto insurer whether your policy covers business use. Vehicle insurance isn’t covered on this site.

How to get business insurance

Tell us about your business

Share what your business does, your estimated annual revenue and how many employees you have.

We refer you to licensed brokers

We refer you to licensed brokers that write cover for your type of business.

Review your options with the insurer

The insurer, or its licensed representative, walks you through coverage, limits and price. You decide whether to buy.

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.

When quotes come back, compare them on the same coverages, limits and deductibles before you compare prices. See how to compare business insurance quotes.

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?

There isn’t one best policy. It depends on what your business does. Most small businesses start with general liability, then add professional liability if they give advice or design work, and property cover if they own equipment or inventory. A licensed broker can confirm what fits your business.

How much does $2 million in liability insurance cost?

The price of a $2 million limit depends on your industry, revenue, claims history and location. A quote for your own business is the only reliable number.

Does business insurance cover independent contractors?

It depends on the policy wording. Some policies cover claims arising from the work of subcontractors you hire. Others exclude it, or require the subcontractor to carry their own insurance. Ask your insurer before you hire, and check what your contracts require.

Can I use my home insurance for a home-based business?

Usually not for business activity. Home policies commonly exclude or limit business equipment and liability that comes from running a business. Ask your insurer whether an add-on or a separate business policy is needed.

What's the difference between general liability and professional liability?

General liability covers bodily injury and property damage to other people, like a customer slipping in your shop. Professional liability covers claims that your advice or service cost a client money. Many businesses need both.

Is business insurance tax deductible?

Often, yes, as a business expense. For a sole proprietor, the Canada Revenue Agency lets you deduct commercial insurance premiums on buildings, machinery and equipment used in the business, on line 8690 of form T2125. The rules depend on the type of insurance and how your business is set up, so ask an accountant. See sole proprietor insurance for more.

Do I need business insurance if I'm a sole proprietor?

Often, yes. As a sole proprietor you and your business are legally the same, so a claim against the business can reach your personal savings and property. Clients and landlords also commonly ask for proof of insurance. See sole proprietor insurance in Canada.

What's the cheapest business insurance in Canada?

We can’t name a cheapest insurer, because the price for your business depends on your details and differs by insurer. What we can do is refer you to licensed brokers so you can compare quotes for the same coverage side by side.

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