Ontario Small Business Insurance

The importance of selecting the best small business insurance coverage

It’s inevitable that mistakes will happen, and those mistakes may affect some aspects of your business, such as your employees, your customers or your reputation. Small business insurance is designed to cover an individual business, which may mean that your coverage could look different from another business’. If everyone had the same business insurance policy, then not everyone would be getting the coverage that they truly need. That’s why there are so many options and so many different things to choose to truly customize your small business insurance. Here’s a list of the most important coverages for your small business. 

Why do I need small business insurance in Ontario? 

Every business has a variety of assets ranging from office space to inventory, including you and your employees. Think about it: What does your business need to run successfully? What would happen if one or more of these elements are impacted? What does that do to your income and your ability to pay your staff? Insurance is your best protection against risks that could negatively impact your business. Our small business insurance brokers are experts in identifying these risks and finding the insurance that will best protect you in the event of a loss. 

A question we often get asked is, “Is small business insurance mandatory?” You can operate a small business without insurance — but we highly advised that you don’t. Since many small businesses begin with very little financial cushioning, and many might still owe money to their lenders and financial institutions, having insurance is a way of protecting your operations from the risks you could encounter just by simply doing business.  

If an accident occurs and a business is uninsured, the company will remain liable for any injured parties or damages and must pay all compensation, legal costs and so on out of its own funds. Unfortunately, in many cases, this could result in a business ceasing operations altogether and going bankrupt. 

Ultimately, it’s better to be safe than sorry. Small business insurance is a necessary business expense, and the money you’d save by skipping out likely won’t be worth it in the end.  

Understanding small business insurance premiums and rates in Ontario

How much does small business insurance in Ontario cost? 

A basic commercial general liability policy for a small business with a $2 million coverage limit usually costs between $400 and $1,500 per year. However, small business insurance costs in Ontario vary depending on your needs. If you require more than CGL protection, such as errors and omissions (E&O), directors and officers (D&O), or cyber liability coverage, your total insurance costs will be higher.

What factors influence the cost of small business insurance?

The costs for small business insurance may be based upon several different variables, but what it comes down to for the most part is your business’s risk appetite, and what influences that risk. For instance, a busy café or restaurant that serves hundreds of customers daily will likely pay much more for its insurance compared to a small retail store that sells art supplies. Both types of businesses require insurance, but they have very different risk profiles. The factors listed below can impact your small business insurance rates:

• Your business’ location. Similar to residential property insurance, where your business is physically placed will affect its costs. Foot traffic, crime rates, weather events and more may contribute to how much you’ll pay. 
• Your business’ annual revenue. This helps to determine the levels of lost income your business will need for business interruption insurance, if it’s ever faced with a loss which forces it to close its doors temporarily. 
• Your business’ size. The larger your business is, physically or otherwise, the more likely a risk is to go unnoticed and later cause potential issues. Typically, the smaller the business is, the less expensive its insurance may be. 
• Your business’ industry. Some industries are simply more prone to risk than others. Businesses that sell silverware may pay less for their insurance than businesses that manufacture memorials for loved ones who have passed.  
• Your business’ experience. Newer businesses with less experience are likelier to make errors, simply due to the nature of what they do. You may expect these businesses to pay more for their insurance than a business that’s been around for a few years. 

Working with an Acera Insurance small business insurance broker is undoubtedly one of the best ways to get an affordable price. If you’re looking for further advice to get the best possible rates, see these tips: 

How can I get more affordable business insurance in Ontario? 

Our team at Acera Insurance is comprised of dependable experts who have the connections and knowledge to help you get a competitive rate on your small business insurance. Our experienced brokers work on your behalf and will help you find all the right solutions.  

We advocate for you first, so you’ll get all the possible options rather than being pushed to purchase from one specific insurance company. We don’t love the word cheap when in context with insurance, because that would imply cutting corners — and for your business, that’s a lose-lose situation. We would prefer you get affordable small business insurance that is comprehensive rather than the cheapest policy available.  

Part of getting more affordable small business insurance is implementing proper risk management strategies. Depending on your small business, this might look like: 

• For businesses that offer a service, have each customer or client sign a waiver which clearly states the risks and potential outcomes of the service you provide. Make sure everyone is aware of what their responsibility is, what they’re to do and so on. 
• Only hiring individuals whose backgrounds have been checked. Your business needs a strong team to see success, and human error is one of the biggest reasons for loss. 
• Training employees appropriately. Have employees re-take an orientation course each year, if possible and applicable. If any new protocol or strategies are implemented, inform each employee on what their responsibilities and roles look like. 
• Clean and inspect equipment before each use. Your equipment may be vital to your business, and having poorly maintained tools could mean an unexpected breakdown or even shoddy workmanship. It could even cause injury to a customer or an employee. 
• Have every employee aware of their responsibilities, roles and who to report to. This ensures a smooth chain of communication. 
• If incidents occur, make sure every member of your team knows to file an incident report and what to include in that incident report.