Ask ten brokers what insurance a small business needs and you'll get ten package quotes. The honest answer starts somewhere else — with what your business actually does. Coverage should follow your exposures: the lease you signed, the advice you give, the van you drive to jobs, the customer data sitting in your email. Not a template, and not a list of everything that could theoretically be sold to you.
The test that sorts the list
Before comparing products, run one question over your operation: what would you have to pay for out of your own pocket, and which of those would you survive? A laptop is a bad month. A liability claim with a legal defence attached can be the end of the business. Insurance is for the second category, and thinking about it this way sorts the list faster than any checklist.
It also explains why the cheapest quote is so often the wrong one. A policy that covers the survivable things and excludes the ruinous one has the economics exactly backwards, and it will still look competitive on a premium comparison. That's the trap our guide to comparing quotes exists to walk you around.
Start with general liability
Commercial general liability (CGL) is the foundation for almost every business. It responds when a third party is injured or their property is damaged because of your operations — a customer slips in your shop, an employee damages a client's floor during an install, a product you sell hurts someone. If a claim involves a body or someone else's physical property, this is the policy that answers.
Two million dollars is the common starting limit; contract work for municipalities, developers, or large corporate clients frequently requires five. Raising a limit is usually far cheaper than owners expect — the expensive part of a liability policy is the first dollar of cover, not the last, so going from $2M to $5M rarely costs anything like two and a half times as much.
One detail worth checking on any quote: whether legal defence costs sit inside the limit or on top of it. Defence is often the larger bill, and if it erodes the limit, the money meant to pay a settlement gets spent arguing about it first.
Property, contents, and the income that stops
Commercial property coverage protects the building if you own it, your leasehold improvements if you rent, plus inventory and equipment. The one thing to get right here is valuation: replacement cost pays what it costs to replace the item today, actual cash value pays its depreciated worth. On a ten-year-old fit-out, that difference is most of the claim.
The add-on owners overlook is business interruption. It replaces lost income and covers ongoing expenses — rent, payroll, loan payments — while you rebuild after a covered loss. Property insurance puts the premises back. Business interruption is what keeps the business alive during the months that takes.
Pay attention to the indemnity period. Rebuilding and re-permitting a commercial space routinely runs six to eighteen months. A policy whose indemnity period ends at ninety days stops paying long before the revenue comes back.
Professional liability, if people pay for your judgment
If clients pay for your expertise rather than a physical product — consultants, designers, bookkeepers, IT providers, engineers, marketing agencies — errors and omissions (E&O) coverage responds when a client says your work cost them money. A missed deadline, a specification error, advice that turned out to be wrong.
CGL does not cover this, and the exclusion is deliberate rather than an oversight: professional services are carved out of the CGL precisely because E&O is the policy that owns them. A business carrying only CGL is fully covered for the customer who trips in reception and entirely uninsured for the advice that lost that customer half a million dollars. We wrote about where exactly that line falls in more detail.
Commercial auto, and the gap that catches everyone
If the business owns vehicles, it needs commercial auto. That part is obvious. The part that catches people is the personal car used for work — driving between job sites, carrying tools, making deliveries.
A personal auto policy is rated and underwritten for personal use. Regular business use may not be covered the way an owner assumes, and the moment to discover that is not after an at-fault collision on the way to a client. Tell your broker how the vehicle is actually used and let them rate it correctly; it is usually a smaller premium difference than the risk of getting it wrong.
Cyber, sooner than you think
If you take card payments, hold customer information, or run the business out of cloud software and email, you carry cyber exposure. Small businesses are targeted precisely because they're less defended, and the claims have gone from theoretical to routine.
Cyber coverage handles breach response, forensics, legally required notification, and lost income while you're down, with privacy breach exposure closely related. It's also one of the few policies where the underwriting questionnaire doubles as free security advice — the controls that lower your premium are the ones that reduce the chance you ever claim.
What you probably don't need yet
An honest list has to include the things you can skip. A two-person consultancy with no premises, no vehicles, and no staff does not need commercial property, fleet, or employers' liability. A business with no directors beyond its owner rarely needs directors and officers cover on day one — though that changes fast once there's a board, outside investment, or a personal guarantee behind a lease.
Equipment breakdown, product recall, crime, and cargo are all real coverages that solve real problems, and none of them belong on a starter programme unless the exposure is actually there. A broker who adds lines without asking what you do is selling, not advising. The 23 specialist lines on our coverage page exist for the businesses that need them, not as a shopping list.
What your contracts will decide for you
Plenty of small businesses discover their insurance requirements the day a client sends a contract. Commercial leases, supplier agreements, and client master service agreements routinely specify minimum limits, require the other party to be named as an additional insured, and demand a waiver of subrogation.
None of that is exotic — it's routine, and it's arranged with the insurer rather than typed onto a document. But it does mean the answer to "what insurance do I need" is partly written by the people you do business with. If a contract is waiting, send it over with your quote request; it's faster than pricing coverage twice. When you need proof, a certificate of insurance is what evidences it.
Read the limits before you sign rather than after. Raising a limit is straightforward and usually inexpensive, but agreeing to a requirement you can't meet — continuous professional coverage from a date that predates your business, say — is a problem best found at the negotiating table.
How the answer changes as you grow
The programme that fits a sole operator stops fitting surprisingly early, and the transition is where most underinsurance happens — not because anyone made a bad decision, but because nobody revisited a good one.
The first employee introduces employment-related exposure and, in most provinces, mandatory workers' compensation registration alongside it. The first vehicle in the company's name moves you from a personal auto conversation to a commercial one. The first premises brings property, contents, and business interruption into play at once. The first significant contract usually raises your required limits and adds additional-insured obligations.
None of these are gradual. Each one is a step change, and each is a good moment to have someone look at the whole programme rather than bolt on one more line. If your business has done any of those things since your last renewal, that's the conversation to have now rather than in eleven months.
What actually drives the price
Commercial premiums aren't published rates, and the inputs are less about size than owners expect. The single biggest factor is what you do — insurers price by class of business, and two companies with identical revenue can sit at very different rates because one installs roofs and the other writes software.
After that: revenue and payroll, which most liability policies are rated on; your claims history, usually five years, where frequency counts against you more than severity; the limits and deductible you choose; and where you operate, since property rates move with construction, fire protection, and exposure to flood or hail.
Which is why a quote that looks unexpectedly high is worth questioning rather than simply accepting or rejecting. Often the fix is a correction — a misclassified business, a revenue figure that included pass-through costs — rather than a different insurer.
The bottom line
Almost every small business needs general liability. Most need property or contents once there are premises. Anyone selling judgment needs E&O, anyone holding data needs cyber, and anyone driving for work needs the vehicle rated honestly. Everything beyond that should be there because your operation calls for it.
The right programme is a conversation, not a checkbox. Tell us what the business actually does and we'll build coverage around it, then compare our full panel for the price. Start a quote — it takes about two minutes.