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What Is Business Insurance?

what is business insurance? - ALIGNED Insurance Brokers

So…what is exactly is business insurance?

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From a historic perspective, here’s what business insurance is…

Helping others. This is something that humans have done intuitively since the very being. In fact, evidence of formal and informal social contracts for transferring and distributing risk in a monetary economy actually date back to the 3rd and 2nd millennia. According to Wikipedia, here’s how insurance started:

“Insurance in some form dates back to prehistory. Initially, people sold goods in their own villages or gathering places. However, with the passage of time, they turned to nearby villages to sell. Two types of economies existed in human societies: natural or non-monetary economies (using barter and trade with no centralized nor standardized set of financial instruments) and monetary economies (with markets, currency, financial instruments and so on).

Insurance in the former case entails agreements of mutual aid. If one family’s house gets destroyed, the neighbours are committed to helping rebuild it. Public granaries embodied another early form of insurance to indemnify against famines.1

Source: 1 Wikipedia – History of Insurance

The concept of one party helping another is the core of what business insurance is all about. The most early forms of insurance were actually business insurance solutions in the form of commitments made by one or a few parties.

These commitments were to reimburse one another if a ship or its goods were damaged and/or destroyed during risky maritime voyages. This form of insurance is still available today – it’s known as marine insurance

This early form of business insurance was fundamental to allowing merchants (i.e. business owners) to feel comfortable enough to take risks in pursuit of financial gain.  However,  like many other things  the answer to “what is business insurance?” has evolved considerably over time…


what is business insurance? - ALIGNED Insurance Brokers

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And here’s a more current answer…

The definition of business insurance hasn’t really changed much since insurance emerged thousands of years ago.

Insurance still involves one party transferring risk to another party or parties and used by business owners (and/or their lenders) to lessen risk and feel comfortable enough to launch, buy and/or invest in a business. 

However, the complexity, availability and amount of business insurance products available has, and continues to rapidly evolve. Today, business owners are able to purchase many types of insurance products to specifically protect their balance sheet as well as their personal assets from a wide range of business risks.

Below is a list of popular business insurance products that we can align for your business…

More commercial insurance products for your Canadian business can be found on this dedicated product webpage.



Related Matters: 3 key factors that contribute to business insurance cost

ONE | The type of business insurance product. Each insurance product provides coverage for specific things and the probability of those things differs from product to product. As a result, the underlying rating for each insurance product also differs. Therefore, the price for the same amount of insurance coverage differs from product to product. For example, $1,000,000 of cyber insurance can cost $4,500 while $1,000,000 of errors & omissions insurance for the same company may only cost $2,500. Keep reading “How much does business insurance cost in Canada?”

TWO | Your business risk exposure base. How much risk a business has is the #1 factor in business insurance pricing. This is because having twice as much property to insure or twice the amount of sales creates twice the amount of exposure to a loss for insurers. For instance, the higher the total insurable value of your commercial property insurance, the higher your business insurance costs will be.

THREE | The specific amount of insurance you buy. No different than any other product, the more business insurance you buy, the more expensive it is. More simply put, a directors and officers insurance policy with a $2,000,000 per claim limit costs more than the same directors and officers insurance policy with a $1,000,000 per claim limit. When you insure the same business through the same insurance company, a higher claim limit will cost more. Keep reading “How much does business insurance cost in Canada?”



We deliver a different insurance experience to Canadian businesses

Our focus on providing important insurance insights here on our website, through our e-newsletter ALIGNMENT Matters and our social media channels is a cornerstone of our business. 

ALIGNED brokers understand the nuances of commercial insurance coverages and can help you make informed decisions about your business insurance options. Bookmark our insurance info blog to keep current with Canadian insurance insights.

What sets ALIGNED Insurance brokers apart

First and foremost, we believe that aligning insurance experts to business needs is one of the most important things an insurance broker can do to support their clients. We are proud to be a premiere insurance brokerage that currently serves more than 1,600 clients across this country. 

In addition to a national operations centre in Cambridge, Ontario, we have offices in Toronto, Ontario; Calgary, Alberta and Vancouver, BC.

We’re here to help you find the BEST commercial insurance…
Our team of insurance brokers is available to help answer any and all questions you might have about all of our commercial insurance products. If you have a question about business insurance, are uncertain about what a particular insurance coverage term means, or simply want to find commercial insurance that directly aligns with your needs, don’t hesitate to call us toll-free at 1-866-287-0448.

It’s time to get your insurance aligned. Want Canadian business insurance that’s ALIGNED with your bottom line? We can help. 365. Call us toll-free at 1-866-287-0448.

We’re ALIGNED across Canada. The ALIGNED Insurance National Operations Centre in Cambridge, Ontario supports our Toronto, Calgary and Vancouver offices. We’re proud our industry peers consistently recognize ALIGNED Insurance as one of the best insurance teams in the country. We are also very proud to be one of the fastest growing insurance brokerages in Canada.

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