Compare commercial & small business insurance quotes

Business insurance (or commercial insurance) protects business owners of all sizes from potential losses as a result of unforeseen events that can occur during your day-to-day operations – this includes property damage, injuries, theft, or even tech errors. The most common types of business insurance are commercial property insurance, general liability insurance, and professional liability insurance (also known as errors & omissions).

Why is insurance important for a business?

Whether you’re a new small business owner or simply thinking about commercial insurance for your expanding operations, small business insurance covers many risks that, without it, could have detrimental effects on your finances. Running a business is an investment of both your time and money. You made a calculated decision to launch the business, so commercial insurance has been created to help you protect it. 

How much does business insurance cost?

The price of commercial insurance varies because many different risks exist depending on the type of business you run. For a small business, where you mostly work out of your home, with a laptop and other simple tools, a commercial insurance policy could be cheap. The bigger and more complex your operation becomes, the more you’re exposed to insurable risks, and therefore the more you will have to pay. 

For example, let’s say you start out making ceramic mugs. With some clay, a pottery wheel, an oven, and a laptop – you can earn a simple income. All things considered, the risks are relatively low, so if a mug breaks, you can make a new one. Should a fire break out, you can use a fire extinguisher. As you scale up, maybe you open a shop, which brings in-person shoppers, employees, and a slew of other potential problems that expose you to serious financial loss. 

All in all, if you own a small business you should expect to pay anywhere from $500 to $5,000 annually for your business insurance policy. Remember, the price you pay will depend on the type of business you own and the associated risk factors of your trade.

The cost of commercial insurance for your business will vary based on a number of factors. In general, the bigger the business and the more potential risks, the more business insurance will cost. Below, we outline the most significant factors affecting the price you pay. After getting an initial business insurance quote online, speak with the broker so you can optimize your policy to get the best value.

• Types of commercial insurance – There are many types of available business insurance coverages and the more you have, the more it will cost. Most businesses begin with general liability coverage to protect themselves against third parties. As you grow, you may want to add more coverage for specific risks or perils which would increase the amount it costs in exchange for more protection. 

• Commercial insurance limits – Within each type of coverage, there are limits you can set. The higher the limit, the greater amount of coverage, and the more it will cost you. Speak with your agent or broker about setting the appropriate limits for your business to avoid overpaying or being underinsured.

• Claims deductibles – The deductible is the money you have to pay before your insurance provider will pay the rest. A higher deductible typically translates into a cheaper premium. It’s a sign you’re willing to accept more risk because you’ll only submit a claim for more than the deductible. When setting your deductible, however, keep in mind you’ll be responsible for the up-front out-of-pocket expense, so make sure you can afford it.

• Business size & employees –The bigger they are, the harder they fall. That said, if you have a warehouse that's the size of 18 football fields, it will cost you much more than a boutique brick-and-mortar retail store with one location. The same goes for the number of people on your team – the more employees on staff, the greater chance of making a professional liability or general liability claim against your business.

• Business industry – The construction industry, for instance, is fairly expensive to insure due to the high risk to its workers and third parties on site. There’s also the expensive equipment used, which must also be insured. A private piano teacher, on the other hand, who teaches out of their home, won’t face the same potential hazards and will ultimately have to pay less for their insurance. 

• Annual business revenue – The more money your business is making, the more it will cost to insure because there’s more to protect if something happens. For instance, if a third party injures themselves in your facility and decides to sue, they may ask for more given the size of your business. 

• Business location – The cost of business insurance can vary significantly from province and city. A business in BC may need protection from earthquakes, increasing the cost of property insurance. Another business may operate near water, meaning they have a higher risk of flood. If your business is in a high crime zone, it may also cost more to protect yourself against theft and vandalism. Before you buy or lease your place, check the cost to insure it.

• Annual business revenue – The more money your business is making, the more it will cost to insure because there’s more to protect if something happens. For instance, if a third party injures themselves in your facility and decides to sue, they may ask for more given the size of your business. 

• Business insurance history – Have you had many claims against your business in the past? Are you notorious for receiving professional liability claims against you? If so, you’ll likely pay more for commercial insurance. An insurance company uses your past as a predictor of what’s to come and a troubled history could mean a turbulent future, and the insurer will charge extra to protect you.