A new survey by the Canadian Federation of Independent Business (CFIB) found that Canadian small businesses are gradually being priced out of insurance coverage – an issue that the insurance industry and provincial governments must work together to address, the federation says.
According to the survey, more than half of small business have seen their insurance premiums increase over the past 12 months – with one in six reporting an increase of 25% or more.
In terms of specific sectors, businesses in the hospitality (25%), transportation (23%), and agriculture (22%) sectors were more likely to report a premium hike of 25% or more in the past year, the survey found. In addition, about 9% of all businesses said that they were unable to find an insurer willing to offer coverage for their business needs in the past 12 months. In terms of specific sectors, 14% of hospitality businesses and 12% of transportation businesses said they were unable to secure coverage in the past year.
“Businesses can’t legally operate without insurance, but many have been priced out or are unable to find an insurer willing to cover them,” said CFIB senior vice president of national affairs Corinne Pohlmann. “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.”
CFIB also found that 40% of the small businesses surveyed said that the COVID-19 pandemic has increased their risk of general liability – reflecting how the outbreak has exacerbated small businesses’ insurance needs.
The organization has recommended the following measures to address the gap in small business insurance needs:
- To provincial governments: 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: Adopt 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,” said 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.”