Home Business Small business insurance costs rising, says Canadian Federation of Independent Business

Small business insurance costs rising, says Canadian Federation of Independent Business

One in ten SMEs can no longer find an insurance provider, says national lobby group

More than half of small businesses have seen their insurance premiums increase over the past 12 months, with one in six reporting an increase of 25 per cent or more, according to some of the latest survey results issued by the Canadian Federation of Independent Business (CFIB).

With those figures in mind, the CFIB is calling on the insurance industry and provincial governments to ensure small businesses have access to affordable insurance coverage.

“Businesses can’t legally operate without insurance, but many have been priced out or are unable to find an insurer willing to cover them,” says Corinne Pohlmann, Senior Vice-President of National Affairs at t he CFIB.

Insurance situation dire

“It would be in everyone’s interest – business owners and insurance providers – to maintain those relationships and work together rather than shutting out a large sector of the economy from this essential service,” addes Pohlmann. “We are pleased that the industry has tried to step up to find solutions but the situation remains dire for too many small businesses.”

The CFIB is calling on the insurance industry and provincial governments to make sure small businesses have access to affordable coverage

According to Pohlmann, Canadian businesses in the hospitality (25 per cent), transportation (23 per cent) and agriculture (22 per cent) sectors were more likely to report a premium hike of 25 per cent or more in the past year.

Insurers reluctant to cover

In addition, nearly a tenth (9 per cent) of all businesses in Canada say they were not able to find an insurer willing to offer coverage for their business needs in the past 12 months, but that number rises to 14 per cent of hospitality businesses and 12 per cent of those in transportation.

The CFIB says the pandemic has exacerbated small businesses’ insurance needs: 40 per cent say COVID-19 has increased their risk of general liability. The federation says it has kept governments and the insurance industry informed about the needs of small businesses and presented its latest survey findings recently to the Insurance Bureau of Canada’s National Commercial Insurance Task Force.

Liability immunity

To move forward, the CFIB is recommending to provincial governments across Canada that they provide liability immunity during the pandemic to all businesses performing services in accordance with applicable public health guidelines while acting in good faith. To the insurance industry, the CFIB suggests adopting a moratorium on cost increases and policy cancellations during the pandemic.

“The insurance industry is willing to listen to small business owners’ concerns and are trying to provide solutions with some providers proactively offering relief measures to their clients,” added Pohlmann. “I encourage businesses to call their insurance broker and see if there is anything available for them. At the same time, CFIB will continue working to ensure fairness for those still struggling to access coverage.”

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