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We understand that Canadian small business owners need to be strategic in their spending. We want to help you better understand the cost of small business insurance and some of the factors that help determine your premiums, so you can make an informed decision on whether to get coverage and what coverage to get.
As a small business owner, you understand that every penny counts—especially when you’re just starting out. Getting your dream business off the ground takes a great deal of time, but also a good chunk of change. You have to prioritize costs, and insurance can often fall to the bottom of the list, but this can be dangerous. Not having the appropriate amount of insurance coverage for your small business could be its downfall. If you experience an expensive loss in your startup stage and don’t have insurance coverage, you may not be able to afford the financial consequences of the loss while still keeping your business afloat. It can be more affordable than you think—TruShield is able to offer small business policies starting at as little as $42/ month.
First things first, what does your business do? Do you work with your hands to build, install or fix things? Do you provide a specialized service or consult? Do you sell products in a store or online? The industry your business operates in will be a deciding factor in what kind of insurance you need, and how much it will cost. If you’re a consultant and you store sensitive client information, you may want to consider cyber risk and data breach coverage. However, if you’re a retail shop owner, this coverage may not be as important to you.
The second question you need to ask: how much is your business worth? This includes the building you operate out of, any inventory you may have, equipment you use, vehicles you operate regularly, and more depending on the type of business you own. Your insurance coverage needs to match the current value and operations of your business. This can vary from industry to industry, as well. If you’re a graphic designer, you may not have any tools or equipment that require coverage other than your computer. Contractors, on the other hand, will likely have a lot of expensive tools and equipment that they need covered in the event of a loss.
You also need to look at the specific risks involved with a business like yours. The risks that a bakery owner faces will be very different than the risks an electrician faces in their day-to-day. A lot of factors can affect the level of risks involved with your business. For example, its location: if your business is located in a city with a high prevalence of crime, your premiums may be higher to reflect that risk.
The types of products you sell, the types of services you provide, and the size of your business are all contributing factors to how much your insurance will cost. There are no averages because policies can vary a lot from business to business, but we can provide some sample scenarios to provide further clarification. Each of the following examples fits a different industry, faces different risks and has different insurance needs. Please keep in mind that even if your small business is similar to one of the following sample scenarios, additional factors may apply that could make your coverage needs different.
Skilled trades and contractors
Evan the electrician
| Occupation: | Electrical contractor – residential maintenance |
| Age: | 34 years old |
| Business tenure: | 5 years |
| Annual estimated revenue: | $490,000 |
| Estimated value of business contents: | $11,000 |
| Estimated value of tools and equipment: | $32,000 |
Evan has owned his own electrician business for the past five years. He has a great reputation with his clients and works mostly with builders, developers and property owners.
What type of insurance coverage does Evan need?
Based on the information above, Evan’s estimated monthly insurance payment would be around $197 for a comprehensive policy with TruShield Insurance.
Professional and creative services
Danielle the designer
| Occupation: | Graphic & web designer |
| Age: | 28 |
| Business tenure: | 3 years |
| Annual revenue: | $52,400 |
| Estimated value of business contents: | $22,000 |
Danielle has been a freelance graphic designer for 3 years, and has built up a strong reputation and portfolio of work. She has core clients she works with on a regular basis, but pitches for new business regularly. She works from home, and her business contents consist of her desktop computer, laptop, DSLR camera, photography equipment, design software and accounting software.
What type of insurance coverage does Danielle need?
Based on the information above, Danielle would be looking at an estimated monthly payment of $115 for her insurance coverage with TruShield Insurance.
Retail business owners
Benjamin the baker
| Occupation: | Baker and shop owner |
| Age: | 33 years old |
| Business tenure: | 7 years |
| Annual estimated revenue: | $336,000 |
| Estimated value of business contents: | $78,000 |
Ben has owned his own bakery for 7 years. He’s become well known all over town for his cupcakes and pastries. Ben’s insurance needs are tied to his storefront location, his equipment, his inventory and his delivery truck.
What type of coverage does Benjamin need?
Based on the information above provided above, Benjamin’s monthly insurance payment would be an estimated $122 a month for CGL and commercial property coverage.
It’s important to remember that what one small business needs may not be what yours needs. Every business is different, and requires a different policy to protect it. Understanding the various types of coverages available to small business owners can be overwhelming, and, quite frankly, somewhat boring. Lucky for you, our online estimator can help. If you’re wondering what kind of coverage you need, and would like an estimate on how much it may cost, just answer a few online questions about your small business. We’re also always available by phone at 1.844.429.9480.
If you’re looking for more information on a specific type of coverage, visit our business insurance resource centre:
The top 5 risks threatening your small businessFebruary 6, 2019 - 7:00 am
Need to file an insurance claim? Here’s what you need to know.January 23, 2019 - 2:41 pm
Getting the right insurance for your small businessJanuary 16, 2019 - 10:30 am
Run your business from home? Here’s why you should have home-based business insurance.January 9, 2019 - 11:29 am
12 tips (yes! 12!) on winter maintenance for your home-based businessDecember 3, 2018 - 10:47 am
Here are 4 cyber risk facts you should knowNovember 28, 2018 - 2:13 pm
