Insurance has become the top operating cost concern for small businesses in Canada with seven in ten reporting that their premiums have gone up since the beginning of the year, according to the Canadian Federation of Independent Business (CFIB) in its July Business Barometer.

These costs are creating a new impediment to small business recovery, at a time when businesses are already in a precarious financial position, said the CFIB.

“Small businesses are often required to have insurance, but it has become increasingly difficult and costly for them to get coverage. CFIB has observed an increase in business concerns with commercial insurance costs since mid-2019, but many firms are now reporting that their rates are going up steeply, that they can’t find an insurer at a reasonable price, or even at all,” said Jasmin Guenette, CFIB’s vice-president of national affairs.

CFIB said more than half (55%) of businesses indicated that insurance was a major cost constraint on outpacing concern over wages and taxes. Businesses in the transportation (87%) and hospitality (82%) sectors were the most likely to report premium increases in another special survey conducted by CFIB in August. One in five businesses (19%) who have had to find insurance report being unable to find an insurer willing to offer coverage for their needs.

CFIB said it is calling on all provincial governments to introduce liability immunity to support small businesses who act in accordance with COVID-19 public health guidance as they reopen. Some provinces have already implemented temporary liability immunity and it should be adopted by all.

“It’s important to find short and long-term solutions to make sure small businesses have access to affordable commercial insurance. CFIB stands ready to work with the industry and government on ways to ensure just that,” added Guenette.

Findings from CFIB’s July Business Barometer are based on 785 responses from a stratified random sample of CFIB members, to a controlled-access web survey. Data reflect responses received from July 6 to 20.

The Canadian Federation of Independent Business (CFIB) is Canada’s largest association of small and medium-sized businesses with 95,000 members across every industry and region.

Source: Canadian Federation of Independent Business

*This story ran previously in our sister publication Insurance Journal.

Topics Trends Commercial Lines Business Insurance Canada