What Business Owners Need to Know about Commercial Insurance in Canada

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Commercial insurance is vital to mitigating risk, but it can be difficult to determine what type of coverage you’ll need. Canadian business owners are at risk of either under- or over-insuring their companies. Too little coverage leaves owners exposed to risk, while too much coverage means that owners are spending more than they need to.

It’s important to understand how much coverage you’ll need and what types.

What Type of Insurance Should a Canadian Small Business Have?

A company’s insurance needs will vary greatly depending on the nature of the business. The Government of Canada recommends seeking advice from an insurance broker or agent who is familiar with your particular type of business.

Some of the most common types of insurance for businesses include:


It’s important to protect your business against liability. Mistakes can and do happen in the business world, and those mistakes can lead to a lawsuit.

·         General liability: Covers injuries to clients or employees

·         Product liability: Offers protection if your products are defective or cause serious harm.

·         Professional liability: Covers lawsuits by clients for errors, negligence or omission when performing professional services.

·         Cyber liability: Provides protection in the event of a lawsuit from a cyber security breach, including data theft.


Businesses need to protect their assets and earnings in the event of an emergency. Property insurance can shield your business.

·         Contents: Protects assets that are stored on the business premises. If the property is leased, the owner will have property insurance. However, that insurance will not cover the contents of your business.

·         Property: Will cover the property as well as any buildings on the property in the event of damage or destruction by covered perils.

·         Vehicle: Businesses that own vehicles will need special insurance to cover them.

·         Business interruption: Provides coverage for your loss of earnings if the business must shut down temporarily.

In addition to property and liability coverage, business owners should also consider taking out life insurance and key person insurance. Partnership or buy-sell insurance may also be needed if the business is owned by partners.

The right insurance coverage will protect a business in the event of an accident, emergency or natural disaster. All businesses will need property and liability insurance. Many will also need specialized insurance that covers risks unique to their business. An insurance broker who understands the nature of your business can help you determine what type of coverage you’ll need to mitigate risk and how much.