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null How much does business insurance cost?

How much does business insurance cost?

When considering business insurance, many business owners are concerned about cost. You may not be able to work out an exact figure, but you can learn about some of the factors that influence the cost of business insurance. The information below is a good starting point to help you come up with a general idea of the cost of business insurance.

Factors that influence cost

A number of factors can cause the cost of insurance to vary. Insurers don't consider all these factors to be equally important, so they give some factors more weight than others when assessing insurance risk.

When it comes to property insurance, the following factors can have an impact on cost:

Business activities

  • Type of product or service offered
  • Annual earnings
  • Business territory
  • Value of assets (equipment, inventory, goods, etc.)

Building

  • Features (type, age, building materials, etc.)
  • Location
  • Site (flood zone, proximity to fire department, etc.)
  • Surroundings (the type of businesses nearby can impact the premium)
  • Added protective measures (alarm systems, sprinklers, etc.)

As for commercial vehicles, here's a list of factors that can have an impact on the cost of insurance:

  • Use (deliveries, service, transporting goods, etc.)
  • Vehicle type
  • Drivers (number, age, violations, etc.)
  • Area of use

Examples of insurance costs

Here are 2 examples—a hair salon and a bakery—to illustrate how much business insurance can cost depending on the nature of the business and the coverage chosen.

Example 1: Hair salon

Amalia has been renting space for her hair salon in the Britannia area of Mississauga. Her annual earnings are $98,000 and her equipment is worth $45,000.

Her insurance coverage includes: 

  • All-risk business insurance covering fire, theft, vandalism and water damage
  • Hairdresser errors and omissions insurance
  • Sewer back-up
  • $2 million in business liability insurance

Amalia's insurance costs about $103 a month with a $1,000 deductible in the event of a covered loss.

Example 2: Bakery

Noah has owned a small bakery in Toronto's hip Kensington Market area for 7 years. He leases the premises, his business's revenues are $145,000 and the insured value of the contents and equipment is $75,000. He had a fire alarm system installed to protect against accidents.

His insurance coverage includes:

  • All-risk business insurance covering fire, theft, vandalism and water damage
  • Loss of money or goods
  • Computer fraud and funds transfer fraud
  • Sewer back-up
  • Equipment breakdown
  • $2 million in business liability insurance
  • Damage caused by roof leaks

Noah's business insurance will cost $160 a month with a $1,000 deductible in the event of a covered loss.

Choosing insurance coverage

Comparing prices is certainly helpful, as it gives you a good idea of insurance costs overall. However, when it comes time to buy or renew your business insurance, you need to look not only at the cost but also at the coverage included. Take a few moments to ask yourself relevant questions like:

  • What kinds of risk might impact your business?
  • How much is your business worth, including buildings, inventory, equipment, etc.?
  • Do you work with your hands or provide consulting services?
  • Do you sell your products online or in a store?
  • Do clients come and meet with you at your workplace?
  • Do you require a vehicle for your business?

Answering questions like these is a good way to familiarize yourself with the kind of coverage your business needs. The important thing is to have the right coverage at the right price to ensure that your business is sustainable.

Ask questions, get informed and speak with your local Desjardins Agent to find out what type of coverage best suits your business's needs. If you'd like more information about your line of business, visit our site.

Certain conditions, exclusions and limitations may apply. The terms and conditions of the coverages described are set out in the insurance policy, which always prevails. The situations presented are fictional examples and are provided for illustrative purposes only.

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