Small businesses across Canada are going digital at pace – moving sales online, shifting operations to the cloud, adopting AI-enabled tools and processing payments digitally – and in most cases, their insurance coverage has not been revisited to reflect what that means, according to Laura Doddington (pictured), executive vice president of retail at Zurich Canada.
"SMEs are going through a lot of change with digital transformation, and I don’t think they always appreciate how much that is shifting their risk profile – whether that's around things like business interruption, cyber exposure, or some of the reliance they have on technology that could fail them. There’s a real opportunity to help them see those risks and get ahead of them,” Doddington said.
The scale of the segment underlines the stakes. According to the federal government's Key Small Business Statistics 2025 report, there were 1.10 million employer businesses in Canada as of December 2024, and 98.2% of them were small businesses. SMEs collectively employ nearly 8 million people – 63.6% of the total private sector workforce – and account for nearly half of private sector GDP. If coverage across that segment is not keeping pace with how those businesses operate, the exposure is not marginal.
Doddington said the gap is not between what products exist and what SMEs need. The products are there. The gap is between how the risk has changed and whether anyone has had the conversation about it.
"Those risks are changing," she said. "People's understanding of that isn't always keeping up with it."
Economic uncertainty is compounding the problem. Doddington said supply chains are being disrupted, input costs are rising, and what customers expect from businesses is shifting – all at once. For an SME navigating all of that, reviewing insurance coverage tends to fall to the bottom of the priority list.
"Insurance isn't necessarily the first thing that an SME is thinking about in a time of uncertainty and change, but actually it's a really important part of what they need," she said.
She said the real question is whether the policy an SME already holds still matches the business it is running today.
"The coverage gap is less about whether the right products exist and more about whether you're selecting the coverage you actually require as an SME to be successful," Doddington said.
A business that was primarily brick-and-mortar three years ago and now generates a significant share of its revenue online has a different interruption exposure, a different liability profile and a different dependency on technology infrastructure. If the coverage was placed for the old version of that business and nobody has revisited it, the gap is real.
Doddington said the risk conversations that SMEs are having with their brokers need to truly reflect the business as it exists today, not the version that was underwritten at the last renewal. She said that disconnect is where most of the exposure sits – not in the policy wording itself, but in the assumptions behind it.
Closing that gap falls on brokers and insurers, not only on the SME owner who is busy running the business. Doddington said the industry needs to be more proactive about initiating coverage reviews and asking whether the risk has moved since the last renewal.
"It requires more from brokers and from insurers around being proactive for our clients and making sure that they understand those risks," she said. "That's always mattered, but it's especially critical now."
Zurich Canada has historically focused on larger commercial accounts but is now building out its retail business, including SME, as a growth priority. Doddington said the opportunity is significant and the insurer sees a role in helping simplify the process for smaller clients while making sure coverage keeps pace with how their operations are evolving.
She said the federal government's push to accelerate AI adoption among Canadian businesses is likely to widen the exposure further. As more SMEs integrate AI tools into their workflows, the risk profile shifts again – and the coverage conversation needs to follow.
"It's a really important market," Doddington said. "And we’re ready to support it."
