Small Business Insurance

Most small businesses in Canada buy their core insurance as a package, often called a business owner's policy (BOP) or commercial package policy. Instead of three or four separate policies, one policy carries several coverage sections, each with its own limit and deductible. The typical sections are:

What a package does not include is just as important. Professional errors, commercial vehicles, and injuries to your own employees each need their own coverage. The exclusions table below shows where each one comes from.

Almost every business with customers, premises, stock or equipment. Canada's business base is overwhelmingly small: Innovation, Science and Economic Development Canada counted about 1.08 million small employer businesses (1 to 99 employees) in December 2024, 98.2% of all employer businesses, including 410,154 in Ontario. More than half of all employer businesses, 59.1%, had just 1 to 4 employees. Those counts exclude the many owners with no employees, who carry the same liability for their work.

A package fits most storefronts, offices, studios, clinics, cafés, trades and service businesses. Sole proprietors are personally responsible for the business's debts and judgments, so for them the policy protects household assets as well as the business. Start-ups should read our startup insurance and sole proprietorship pages. If you work from home, a home policy is rarely enough; see home-based business insurance.

A package is one contract, one renewal date and usually one premium, but each section still behaves like its own policy. Reading the declarations page section by section is how you see what you really bought.

Because sections share one contract, a single event can trigger several at once. A kitchen fire in a café can produce a property claim for equipment and stock, an interruption claim for the closed weeks, and a liability claim from a neighbouring tenant whose unit was smoke-damaged.

Two details on the liability side are worth checking. First, most general liability in a package is written on an occurrence basis: the policy in force when the injury or damage happened responds, even if the claim arrives years later. Professional liability, by contrast, is usually claims-made, which is one reason it sits outside the package. Second, the aggregate limit is the most the policy pays for all claims in the term, so one large claim early in the year can leave less for the rest.

On the property side, check the deductible on each section, whether stock is valued at cost or selling price, and whether the policy carries a coinsurance clause. A low limit on a coinsured policy reduces every claim, not just large ones.

Budgets are tight at the start, so sequence matters. Buy first what could end the business or what a contract requires before you can trade. Our new business insurance checklist goes into detail; the short version is:

The most common question is whether a package is just a bundle of the same policies at a discount. It isn't quite. The trade-off is simplicity and price against limits and flexibility.

Many businesses end up with a hybrid: a package for the core, with standalone professional liability, cyber or auto alongside. See bundle and save for how we combine them.

A package bought in year one rarely fits year five. The triggers are predictable:

A short annual insurance review catches most of these before a claim does.

Whether liability insurance is a legal requirement depends on your province, industry and licences. For most small businesses the requirement comes from leases and contracts, while several laws decide what you are liable for and what you must tell your insurer.

A hypothetical gift shop leases a ground-floor unit and carries a package with general liability, contents and stock, and business interruption. A pipe in the unit above bursts overnight in February. Water ruins part of the stock, damages the flooring the owner installed, and closes the shop for three weeks. While the shop is being dried, a customer at the reopening slips on a wet floor and breaks a wrist.

The property section pays for the stock at cost and the flooring as tenant's improvements, less the deductible. The interruption section pays lost profit and continuing rent for the closure. The liability section defends the slip-and-fall claim and pays any settlement. One event, three sections. If the owner had let stock values climb for the holidays without raising the limit, or never told the insurer about a new online sales channel, each section could have paid less.

There is no flat price for small business insurance, and any figure quoted without your details is a guess. Insurers price each section on its own rating base, then add the sections together. The Insurance Bureau of Canada lists the main questions as the coverage you need, your liability exposure, your property's replacement cost, your location, your claims history and market conditions, and notes that insurers also consider the risk management you have in place.

The market also matters. Marsh's Global Insurance Market Index showed Canadian commercial insurance rates down 6% overall in the third quarter of 2026, which makes this a reasonable time to fix limits and gaps. Our explainer on hard and soft markets covers why premiums move without a claim.

To get an accurate price, have ready: a description of what the business does, annual revenue and payroll, the address and construction of your premises, values for contents, equipment and stock, any lease or contract insurance requirements, and five years of claims history. The more precise the submission, the fewer assumptions an underwriter has to price in.

Insurabiz is an independent brokerage that works only in business insurance, so we compare packages and standalone options across our panel rather than selling one insurer's product.

Ready to start? Request a quote or read what insurance a small business actually needs.

Our claims team supports you from first notice to settlement. How a business claim actually works explains each stage.