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December 29, 2022

Insurance for Small Business – Canada

As a small business owner, you know how important it is to protect your investments. Having the right insurance coverage can be the difference between staying afloat and facing a financial loss that could leave you in ruin in the event of an accident or natural disaster. Whether you’re just starting or have been running your business for many years, investing in small business insurance is essential to safeguard yourself and your company.

What is small business insurance?

Small business insurance, sometimes called commercial insurance, is a type of coverage that protects businesses against financial losses resulting from events such as accidents, natural disasters, and lawsuits. It can also provide compensation if an employee or customer gets injured on business premises. Business insurance policies are designed to cover specific risks associated with running a business, including property damage, liability claims, and lost income due to interruption of services.

Who needs small business insurance?

All kinds of Canadian small businesses and Canadian entrepreneurs need business insurance. Regardless of the size and scope of your operations, having adequate protection against financial losses resulting from accidents and natural disasters can be the difference between staying afloat or facing a devastating loss.

What kind of insurance do I need for my business in Canada?

When running a business in Canada, having the right insurance coverage is essential for protecting your investments. Different companies have different needs when it comes to insurance, so it’s essential to be aware of what type of coverage you need. Small business owners should generally consider investing in liability insurance and property damage insurance as a minimum requirement.

Always make sure to have a conversation with a licensed insurance broker; they’re trained to help you understand your risks and how to cover them effectively.

Taking the time to research and understand the various types of small business insurance available can also help ensure that you are adequately protected against potential risks associated with running your company.

What are the different kinds of insurance for small businesses?

Unsurprisingly, a wide variety of insurance types are available to protect your business. We’ll briefly touch on some of them, but each type of insurance deserves its own full-length explanation.

Commercial General Liability Insurance (CGL)

Often shortened to just CGL, Commercial General Liability insurance is a type of business liability insurance that provides financial protection and liability coverage for businesses against claims due to third-party bodily injury and property damage caused by your business resulting from accidents or negligence.

Commercial Property Insurance

As the name would suggest, commercial property insurance, sometimes known as business property insurance, is a type of coverage that protects businesses from physical loss or damage to their property and contents due to an accident or disaster. This insurance can cover both buildings and contents within the premises, such as computers, furniture, inventory, etc.

Business Interruption Insurance

This type of coverage can help protect businesses from the financial losses caused by an interruption in operations due to an accident or disaster. Business interruption insurance will compensate for lost income, extra expenses incurred due to the disruption, and other costs related to getting your business back on track after the incident.

Professional Liability Insurance

It is primarily by those that offer professional services, e.g. lawyers, accountants, consultants etc. Professional Liability Insurance, also known as Errors and Omissions (E&O) insurance, is a business insurance policy that provides financial protection for businesses against claims due to mistakes made by employees or services provided by the company. This type of coverage can help protect companies from costly legal fees if they are sued for errors or negligence related to their services.

Directors & Officers (D&O) Liability Insurance

This form of insurance coverage is tailored to protect those running a business. Directors & Officers (D&O) Liability Insurance provides financial protection for claims made by shareholders, employees, customers and other third parties due to wrongful acts or omissions committed by directors and officers during their duties. This coverage helps protect companies from costly legal fees associated with defending against such claims and any compensation awarded.

Commercial Auto Insurance

Not too dissimilar to your personal auto insurance, Commercial Auto Insurance provides financial protection for businesses against claims related to the use of vehicles owned or operated by the company. This coverage can help protect companies from liability in case of accidents that occur while on the road and also covers damage caused to their vehicle. It can also provide coverage for medical expenses, legal fees and other costs incurred due to the accident.

Cyber Insurance

Increasingly important these days with an ever-growing cyber risk. Cyber Insurance provides financial protection against claims due to cyber attacks, data breaches, and other forms of malicious activity. Consider the impact of leaked customer data or the credit card details you might store. Cyber Insurance and data breach coverage can help protect your company from costly legal expenses associated with defending against such claims and any compensation awarded in case of a data breach or other cyber-related incident.

How much does small business insurance cost?

Many factors can influence the cost of your insurance policy when it comes to small business insurance. This includes your business operations, the type and amount of business coverage you need, and the unique risks associated with your business. Other important considerations include your physical assets, such as buildings or equipment and any additional liabilities related to employees or subcontractors. It’s vital to assess all these factors to determine the business insurance policy you need and what kind of premiums will be best for your budget.


Insurance for small businesses can be a confusing beast with various coverage options and policy types to protect your business. Do your research, but ultimately, the trick is getting in touch with a qualified insurance broker at a reputable insurance company. They’ll get a deep understanding of your business needs and get you the coverage you need.

Written By

<a href="" target="_self">Aran Joyce</a>

Aran Joyce

Insurance Contributor

Aran Joyce is an insurance contributor for ClearlyRate. He aims to use his extensive insurance and business background to make complex insurance jargon easily digestible.