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How Much Is Small Business Insurance?

How Much Is Small Business Insurance?

How Much Is Small Business Insurance?

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How Much Is Small Business Insurance? The answer to how much is small business insurance, is like asking “how much is a car?” because the answer can range dramatically based on the make, model, year, features etc. etc.  We’ll explain how small business insurance costs are determined further, but we also wanted to share the below table to give you a rough idea of how much is small business insurance based on real data from ALIGNED Insurance brokers small business insurance client base across Canada.

Annual Revenue  Average # of Small Business Insurance Policies How Much Is Small Business Insurance?
$O-$100,000 1.3 $400-$1,000 annually
$100,000-$250,000 1.47 $1,000-$2,500 annually

Factors That Impact How Much Is Small Business Insurance

Despite there being an increasing push for the simplification of small business insurance pricing, and all other insurance product pricing, figuring out how much is small business insurance is not a simple task and if you need further proof just speak to an insurance actuary.  Like doctors insurance actuaries spend 6-10 years after their undergraduate degree working through intensive and extremely challenging formal professional education coordinated by The Canadian Institute of Actuaries.  However, all actuaries do use similar factors to help them figure out how much is small business insurance and below are some of the main factors they consider:

  • Projected annual revenue: This is the single most important factor to determine how much is small business insurance as it is the most objective measure of much activity is happening in the business.  Activity in a business correlates strongly with business risk i.e. the more customers you have the higher the probability of a claim.
  • Source of revenue: Often pulled or assumed from a description of operations this is a key element in calculating how much is small business insurance because different streams of revenue are more or less risky and therefore have different rates applied to them.  For Example – 2 restaurants have $200,000 in annual sales.  Restaurant #1 sells no alcohol, but restaurant #2 generates 50% of it’s revenue from alcohol sales.  Despite the restaurants having the exact same annual revenue restaurant #2 will have considerably higher small business insurance premiums than restaurant #1 because alcohol revenue has a different insurance rate than food revenue.
  • Type of small business insurance product: There are numerous types of insurance products the small business insurance brokers and experts at ALIGNED Insurance can help with which provide coverage for very specific and different things.  As a result of these differences the various small business insurance products have different costs. Example $1,000,000 of small business general liability insurance has a very different cost than $1,000,000 of small business property insurance.

Why Is Understanding How Much Is Small Business Insurance Important?

There are a lot people and companies that would like to lead you to believe that small business insurance products and their pricing are simple, and yes there are some products that simpler than others.  However,  as a small business owner be weary of small business insurance that seems too simple and easy, becuase it is probably too good to be true and with small business insurance like all things in life….you get what you pay for…

To Discuss “How Much Is Small Business Insurance?” Or For A Small Business Insurance Quote Contact One Of Our Many Licensed Canadian Commercial 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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