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How Much Is Liability Insurance For A Small Business In Canada?

How Much Is Liability Insurance For A Small Business In Canada?

How Much Is Liability Insurance For A Small Business In Canada?

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How much is liability insurance for a small business in Canada is a great question and one that entrepreneurs who are contractually required to provide evidence of liability insurance for a small business in Canada and/or people planning on launching a business in Canada ask regularly.  The experienced Canadian commercial insurance brokers at the national insurance brokerage ALIGNED Insurance are well equipped to discuss how much is liability insurance for a small business in Canada?  In addition, this post has been created to provide some insight into the factors that go into how to answer the question how much is liability insurance for a small business in Canada.

How To Determine How Much Is Liability Insurance For A Small Business In Canada

To answer the question “how much is liability insurance for a small business in Canada?” it’s important to understand that there unfortunately are baseline costs for the issuance of an insurance policy that provides access to potentially millions of dollars from some of the top insurance companies in Canada.  For example whether it’s a policy for a home based business that just needs liability insurance for a small business in Canada to satisfy a personal insurer’s requirements or are a rapidly growing tech company that landed a large contract, an insurer has to pay people to underwrite it, negotiate with the broker on terms, conditions, pricing etc, then prepare the documentation, issue it to the broker etc.  In addition, for every insurance policy a top Canadian insurance company issues it needs to put up capital reserves to offset the potential exposure in order to adhere to a very strict regulatory framework which is actively policed by organizations likes OSFI and others.

Once the basic costs associated with administering the issuance of a liability insurance for a small business in Canada are covered off the primary factors in determining liability insurance cost is established by having a complete and clear understanding of what the business is doing to generate revenue.  With this clarity a rate can be determined and insurers then need to know how much activity is anticipated, which is most commonly expressed in annual projected revenue, broken down by type of business activity, if the revenue streams for a business are diverse.

This results in a simple mathematical equation: rate (determined by activity) X revenue (amount of activity) = annual premium

With this baseline premium established the cost for various limits, deductibles, endorsements etc. are just factors that can be applied to increase or decrease the cost of liability insurance for a small business in Canada.

Ultimately the answer to how much is liability insurance for a small business is Canada can only be answered by  working through the above calculation and needs to determined individually for each organization, but ALIGNED Insurance is the commercial insurance broker of choice for nearly 1,400 organizations across Canada and below is table to give you a rough sense of how much is liability insurance for a small business in Canada.

Annual Revenue  Approx Premium For $1M Liability Limit
$0-$100,000 $350-$1,500
$100,000-$500,000 $1,500-$2,500
$500,000-$1,000,000 $2,500-$4,000

To Discuss How Much Is Liability Insurance For A Small Business In Canada? Or For A Liability Insurance For A Small Business In Canada Quote Connect With One Of Our Many Licensed Canadian Business Insurance Brokers Today at 1-866-287-0448

ALIGNED Across Canada   100% Canadian owned, ALIGNED is a premiere insurance brokerage that serves more than 1,400 clients across the country. ALIGNED’s offices in Toronto, Calgary and Vancouver are supported by a national operations centre in Cambridge, Ontario. Uniquely within the industry, ALIGNED creates, negotiates and delivers the best business insurance and risk management strategies/solutions to organizations like yours.

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