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How much does insurance cost for a small business? – KBD

October 15, 2022

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The average business insurance policy in Canada costs between $500 and $5,000/year.

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true or false?

Reading: How much does insurance cost for a small business canada

all small businesses are exactly the same.

false!

of course.

As a small business owner, you were probably offended by that very suggestion.

Well, since every small business is so different, there’s no quick answer to this question.

The cost of insurance for a small business can vary greatly depending on its size and scope.

Some industries are more at risk than others. Some companies have more revenue than others.

and there are tons of other variables.

That’s why the real answer to the question, how much does a small business insurance policy cost? is… depends.

Let’s look at an example to explain why.

A roofing company will have higher small business liability insurance costs than an ice cream store.

let’s look at it from an insurance company perspective:

Looking at the likelihood of causing harm to others, what can go wrong for a roofer?

a roofer could

set ceiling & the entire building catches fire while the shingles are being installed
causes structural damage to the roof during the course of construction
leads to faulty workmanship, resulting in a serious leak of water

an ice cream parlor could

accidentally getting a stone in your ice cream and chipping someone’s tooth
being responsible for a customer’s slip & fall due to slippery floors
serving spoiled ice cream, resulting in someone getting sick

The average roofer claim can be over $50,000!

While your average small ice cream parlor liability claim is about $5,000.

This brief comparison shows that while both businesses can cause harm to other people or things, these accidents vary significantly in dollar amounts.

In other words, the roofer is more likely to cause a major liability claim for a small business than the ice cream parlor, and the price of your insurance policy will reflect this reality.

This difference is why the average ice cream parlor pays less for their small business insurance than a roofing company.

get ready for today’s blog, because we have a lot ground to cover.

index:

how we calculate the cost of your commercial insurance
what does commercial insurance cover?
how to reduce the cost of your commercial insurance
Can home insurance cover my business/liability?

industries

Amazon seller insurance
Contractor insurance
Restaurant insurance
Fabric dealer insurance
Insurance advertising agency insurance</li
office furniture distributor insurance
food distributor insurance
manufacturing insurance
studio insurance yoga
personal trainer insurance

how we calculate the cost of your business insurance

In a nutshell, there are four main factors used to calculate your small business insurance quote:

What does business insurance cover?

Before delving into the coverages that can benefit your business, keep in mind that any of these protections can be purchased as stand-alone policies.

commercial liability insurance

This covers you for any bodily injury or property damage that you, your employees, or your product may cause to a third party, such as your customers or another business.

Your landlord will often require liability if you are renting out your space, as they want to ensure you are insured in the event you cause damage to their building.

General liability limits typically range from $1,000,000 to $5,000,000, but a single liability policy can cost as little as $500 per year.

Some factors that will determine small business liability insurance costs:

Professional liability

for companies that offer services – errors & Omissions insurance covers your corporation against claims arising from business or professional practices, such as negligence, malpractice, or misrepresentation.

business property insurance

includes insurance for buildings, equipment or inventory owned by your business.

Insured perils may include fire, theft, vandalism, water damage, earthquake & more.

The minimum cost for the contents of your business (products, equipment, stock, etc.) is usually around $75 per year.

This $75 insurance cost will typically cover about $20,000 worth of commercial content.

If you’re a Quebec homeowner, you’ll need regular building insurance or short-term rental insurance, depending on your situation.

factors that can increase the rate you pay for your content:

if its contents are easily damaged (eg, glass, textiles)
if its contents are subject to theft (eg, sporting goods, small electronic devices)
if your neighbors are considered high risk (eg bars, manufacturers)
if your building catches fire easily (concrete vs. wood)

commercial vehicle insurance

If a vehicle helps an employee perform work-related tasks, then it is a business vehicle and must be insured accordingly.

To keep things simple, you need a commercial auto insurance policy if your employees perform:

daily trips to visit clients
transport goods or materials
make deliveries

The commercial auto policy must be registered in the name of your company and must bear a commercial license plate.

business interruption

This covers lost profits, fixed costs and administrative salaries during the period your business is forced to close due to a covered claim.

again, premiums for this protection can be as low as $75 per year and increase in cost as the amount of coverage increases.

The same factors that influence property coverage influence the cost of business interruption insurance, as the two are typically claimed together.

Cyber insurance

provides coverage against the effects of an unauthorized breach of your systems by a third party.

In other words, it’s insurance for when you get hacked.

To summarize, the right cyber insurance policy will cover your business for:

breach notification costs (notify your customers of the cyber attack by certified mail)
the cost of recreating the lost data
the cost of repairing your IT systems
public relations costs to repair your brand image

A small business cyber insurance policy costs between $800 – $1,200 per year.

How can I lower the cost of my small business insurance?

Here are some tips to help keep your small business insurance premiums low as your business grows:

Avoid claiming for small damage

try to fix the little things yourself, because every time you claim, your insurance premium will go up.

Unfortunately, frequent claims result in paying more for your insurance over time.

In many cases, your premium increase will be greater than the claims themselves!

that is why it is better to claim for significant damages; ideally, we suggest not claiming anything under $2,500.

all small business insurance companies offer discounts to those with no claims.

raise your deductible

By increasing your deductible, you are decreasing the likelihood of filing a claim, as a more substantial amount of damage needs to occur before a claim is possible.

insurers will offer discounts every time you increase your deductible.

For example, increasing your deductible from $1,000 to $2,500 would give you a 5% annual discount (with most insurance companies).

install alarm & sprinkler systems

Small business insurance companies offer credits to organizations that use centrally monitored alarm and alarm systems. sprinkler systems, as they can help mitigate damage.

While it may not be feasible for you to install a sprinkler system if you don’t own your building, keep this in mind when choosing a new office location.

install antivirus software & create a “disaster plan”

be proactive and develop a disaster plan that prepares your business for cyber attacks or data breaches.

Creating a detailed list of what to do in the event of a cyber breach can literally save your business.

Does my home insurance cover my small business?

If you are a small business owner operating your business from your home, you may be eligible for “home-based business coverage” through your residential home insurance provider.

This is an add-on to your home insurance policy and covers your business contents and general commercial liability.

The additional premium for these protections can be as low as $150 per year.

Industries eligible for commercial home-based insurance include:

professional firms (lawyers, accountants)
hairdressers
hairdressers
beauticians
music teachers</li
nurseries
some small fabrications & distribution business

If you’re thinking of starting a home business, remember to advise your insurance provider!

amazon seller insurance

If you sell large volumes on Amazon, you should treat that business like any other business, and that includes getting business insurance.

Not everyone realizes that on a professional merchant account (for high volume sellers), Amazon requires you to have liability insurance.

the problem?

It can be difficult to find business insurance for e-commerce resellers.

the main reason: high us value. uu. sales.

Because of the propensity of Americans to sue each other, many insurance companies do not take advantage of the opportunity to work with companies that sell many products in the states.

At kbd, we get a lot of first time insurance buyers.

lack of insurance experience is another thing insurers don’t like to see.

so many amazon sellers can’t find reasonable insurance.

Fortunately, we can help you if you’re having trouble.

we work with a certain insurance company out of london who loves writing insurance to resellers; It is their bread and butter.

We put many dealers online with them and we can do the same for you.

learn more about amazon seller insurance 👉

general contractors

Most of the general contractors we insure only require two types of insurance: liability and tool float.

Business liability insurance covers contractors for bodily injury or property damage that you, your employees, or your product may cause to a third party, such as your customers or another business.

A tool float reimburses you for stolen tools, no matter where the theft occurs, be it in the workplace, your office, or your home.

We also offer niche insurance products for contractors such as Builders Risk and Construction Bonds.

read more about commercial insurance for contractors 👉

restaurants

Believe it or not, restaurants offer a pretty high insurance risk.

Between kitchen fires, slips and falls, food poisoning, choking and much more, there are many things that can go wrong both in your building and among your clientele.

If you recently opened a restaurant and are looking for your first business insurance policy, you will pay a higher rate than other established restaurants.

Restaurant insurance offers coverage for two main perils: property damage and lawsuits.

read more about commercial insurance for restaurants 👉

Textile distributor

A textile distributor’s worst nightmare: smoke damage.

Because such an incident can wipe out an entire warehouse of merchandise (a potentially huge insurance claim), textile distributors can expect to pay higher insurance rates for their stock.

what else?

If you are importing shipments from abroad, you should ask your broker about ocean freight insurance.

Find out more about insurance for textile distributors 👉

advertising agencies

What can go wrong for an advertising agency to have to file an insurance claim?

Well, aside from the usual ownership and liability stuff that any business would need, there is the possibility of web attacks.

many advertising agencies we have relationships with have become almost web developers.

and that opens them up to cyber threats.

pro tip: don’t host your clients’ websites on your servers. if they get hacked, there’s a good chance they’ll try to sue you. (Even if it’s not your fault, you’ll still have to defend the lawsuit.)

more information about commercial insurance for advertising agencies 👉

office furniture distributors

what do you need?

Commercial general liability insurance in the event your business injures another person or causes damage to their possessions.

and transit insurance, which covers the goods while they are between destinations.

pro tip: if you distribute equipment and use third-party installers, always be sure to request a copy of your commercial liability insurance policy.

Learn more about commercial insurance for office furniture distributors 👉

traders

here, we’re talking to welders, electricians, plumbers, carpenters, painters, roofers, commercial cleaners, and more.

If that’s your line of work, you need two types of coverage:

liability: in the event that you or your employees cause bodily injury or property damage to a third party. tool floater: in case your tools are stolen at the workplace, in your office, at home or anywhere else.

learn more about business insurance for businesses 👉

food distributors

In the case of meat distributors, the great coverage is equipment breakdown insurance.

This covers you in case your freezer breaks down and all your meat thaws and spoils.

Know that if you store a large quantity of frozen food products, an equipment repair company will ask you to install an alarm in the freezer, so it’s best to do it before an incident occurs.

learn more about food distributor insurance 👉

manufacturing

Your biggest concern is product liability, and that’s included in commercial general liability insurance coverage.

Business interruption (replacing lost revenue, fixed costs, and administrative payroll after a covered loss) is another good coverage to have.

thanks to americans’ love for suing companies, the more product you sell to the us. In the US, the higher the cost of your liability.

learn more about insurance for manufacturers 👉

Yoga studio

Good news: insurance companies offer very affordable coverage for yoga studios.

There’s not much that can go wrong.

Of course, there is always the possibility that a client could be injured during a session.

To be covered, studio owners must assume professional liability and general business liability.

namaste.

learn more about yoga studio & gym insurance 👉

personal trainer

Personal trainers must have professional liability and general business liability.

Many fitness-related injuries occur in the “gray area,” where it is unclear whether they should be classified as a cgl claim or a professional liability claim.

for that reason, you should have both.

At kbd, we can secure large, fully staffed gyms as well as private trainers.

learn more about personal trainer insurance 👉