With more small-business owners claiming that rising insurance costs are creating financial strain on their overall operations, Ontario Finance Minister Rod Phillips has called for insurance providers to put an end to discriminatory pricing in their business policies.
In an interview with The Globe and Mail, Phillips said that he expected insurers to “treat their customers fairly.”
“Our government has been keeping a close watch during this pandemic to ensure insurance companies are meeting the needs of small businesses during this unprecedented time,” he said.
The COVID-19 pandemic has caused unprecedented financial pressures on most businesses, but what’s deeply concerning, according to the Canadian Federation of Independent Business (CFIB), is the increasing number of small-business owners contacting them about mounting insurance costs.
A recent survey by the organization found that almost half of small-business owners were concerned about the financial impact of rising insurance costs on their overall operations.
According to The Globe report, some bars and restaurants in Ontario that went to renew their policies this year have seen an up to 300% rise in premiums, while others have been denied insurance.
CFIB chief executive officer Dan Kelly told The Globe that some price increases were taking place even before the pandemic and the continued rise is indicating that the industry is “moving into a hard market.”
“But the timing couldn’t be worse for our members,” he said. “Businesses have more limited revenue than ever. Not only are you dealing with your sales going off a cliff, but your costs are rising dramatically. That is a recipe for an impossible business scenario.”
Kelly added that insurers and other industry groups he met with presented several reasons why rates were going up, including a dip in interest rates and the millions of dollars in customer rebates during the pandemic.
Recently, Phillips, together with Toronto Mayor John Tory and the Financial Services Regulatory Authority of Ontario, met with several insurance companies to explore options on how to keep premium rates down.
The finance minister told The Globe that he will be keeping a close watch on the situation to ensure that insurers are adhering to a “high standard of conduct” when it comes to dealing with their policyholders.
