How much does business insurance cost?

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If you’re a small business owner, you’ve likely thought about insurance. The question is, how much does business insurance cost?

It depends on many factors such as the type of business you operate, how many employees you have, and how much insurance you need. While this may sound complicated, it’s important to protect you and your business.

You might be worried that insurance is expensive. But don’t worry, it doesn’t have to be. In Canada, there are business insurance providers that offer real-time quotes, so you can get an idea of the price you will pay from the comfort of your home. Plus, the price you pay for insurance is far cheaper than paying out of pocket for any accidents or lawsuits

How small business insurance costs are calculated

There are a number of risk factors that go into determining the cost of your small business insurance. The good thing is that when you apply for insurance, you just need to answer some questions to get a quote.

  • Here are some of the common questions you’ll be asked and why they’re relevant.
  • The industry your small business is in. Some industries are riskier than others.
  • Where your business operates. If you have operations in the U.S. it may affect price.
  • The value of your equipment and business property. If you are a consultant who runs your entire small business off your laptop, that’s a lot less of a cost to repair or replace than a photographer with five cameras and ten lenses.
  • How much revenue your business generates. If you’re a multimillion-dollar company, you will clearly have more risks than a small one-person shop, or a small storefront location with a couple of staff.
  • Previous claims. Credits and discounts are often provided for small businesses that have a favourable claims history.

Keep in mind that depending on what your business is, you may need several different insurance policies to ensure you are properly protected.

The most common types of insurance products for small businesses

  • General Liability insurance
  • Professional Liability insurance
  • Contents insurance
  • Cyber Liability insurance
  • Legal Expense insurance

As a writer, I only need general and professional liability insurance. Since I work out of my home, I don’t need any content insurance at all since my home insurance policy covers me.

As you can imagine, a professional or someone who owns a business with inventory will have different requirements than me.

How much business insurance do I need?

When it comes to how much business insurance you need, people are usually referring to liability insurance. In many cases, it depends on your clients. For example, if a client won’t hire you unless you have at least $1,000,000 in liability insurance, then that’s how much you’ll need.

You may also run into a similar issue if you’re renting an office space. Your landlord may also require you to have $1,000,000 in liability insurance. This doesn’t mean you need $2,000,000 total in insurance. You would just need a minimum per occurrence limit of $1 million. The aggregate amount is more of a personal preference. Protecting your small business is vital, so get the coverage that you need.

Where to get business insurance?

Types of business insurance packages will vary from insurer to insurer. To give yourself the best opportunity at finding a great rate, you should shop around. APOLLO is one of Canada’s leading digital insurance providers and offers clients speed, convenience, and some of the best prices on business insurance in Canada.

They specifically structure package programs for small businesses so you can get everything you need in one place and to cover off the various exposures your small business faces.

If your business involves offering professional services, making recommendations, providing solutions, or otherwise representing the interests of your customers, you’re assuming that risk. That means you should have liability insurance.

About Barry Choi

Barry Choi is a Toronto-based personal finance and travel expert who frequently makes media appearances. His blog Money We Have is one of Canada’s most trusted sources when it comes to money and travel. You can find him on Twitter:@barrychoi

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