By MorinvilleNews.com Staff
A report from the Canadian Federation of Independent Business (CFIB) reveals that insurance costs are becoming increasingly unaffordable for small businesses across Canada. According to the report, 68% of small business owners identify insurance costs as a top concern, with half experiencing a 10% or higher increase in premiums over the past year.
“Commercial insurance provides a safety net for small businesses and protects them against financial losses, property damage or natural disasters. But it’s getting harder and costlier for small businesses to get coverage at a time where they’re already grappling with many other cost increases,” said Jasmin Guenette, CFIB’s Vice-President of National Affairs. Guenette highlighted additional challenges in provinces where taxes on insurance products and premiums exacerbate financial pressures on businesses.
The report identifies commercial property, commercial auto, and general liability insurance as the most common—and costly—types of coverage for small businesses. A 10% rise in annual insurance costs typically translates to an additional $1,500 in premiums for a small or medium-sized business.
Nearly half of surveyed business owners expressed dissatisfaction with available insurance options. Many said they remained with their existing provider because they could not find affordable alternatives. Over 60 percent of small businesses surveyed reported obtaining their insurance from just three companies.
While many businesses are satisfied with customer service and provider responsiveness, the report emphasizes the need for improvement. Business owners are seeking more streamlined processes for obtaining and renewing insurance and greater transparency around costs.
The CFIB is recommending the elimination of the Insurance Premium Tax and Retail Sales Tax on insurance products for small businesses. It also calls for greater regulatory consistency between provincial and federal governments, as well as the reduction of barriers for new insurers entering the market. The organization also supports the promotion of alternative insurance models, such as captive insurance and cooperatives, to boost market competition.
The report urges the insurance industry to enhance its support for small businesses by offering specialized tools, ensuring fee transparency, and dedicating a section of the Insurance Code of Consumer Rights and Responsibilities specifically to small businesses.
“It’s concerning that small businesses are facing exorbitant costs for something as essential as insurance,” Guenette said. “Governments and the insurance industry must work together to ensure rates are affordable and businesses have access to diverse options.”
