After a few years of rising commercial insurance costs, the Insurance Bureau of Canada (IBC) is reporting that rates are coming down due to more companies entering the market. MSA Research says that there are now 10% more companies actively competing in the commercial insurance space, which is good news for consumers.
A report by Marsh LLC, a global broking and risk advisory firm, has shown a 3% decline in commercial insurance rates at renewal time during the third quarter of 2024. Although rates are dropping, the IBC cautions small- and medium-sized enterprises (SMEs) to remain proactive in their risk management strategies.
To take advantage of these favourable market conditions, we at Lane’s strongly recommend reaching out to knowledgeable insurance brokers such as us at your next renewal time. We are proactive, hard-working and know what questions to ask to help you navigate the complexities of commercial insurance.
What to consider for your commercial insurance
1. What kinds of commercial insurance do I need?
Every business has unique risks and corresponding insurance needs. Common types of commercial insurance include:
- Commercial property insurance: Protects physical assets like buildings and equipment.
- Commercial liability insurance: Covers legal expenses and damages from claims of negligence or injury.
- Business interruption insurance: Compensates for lost income during a disruption caused by insured events.
- Crime insurance: Protects against theft, fraud, and other criminal activities.
- Cyber insurance: Covers losses related to data breaches and cyberattacks. As cyber threats become more sophisticated, protecting against breaches through cyber insurance has become increasingly important.
Businesses offering professional services should also consider errors and omissions (E&O) coverage. Similarly, a commercial auto insurance policy is essential if your business uses vehicles.
2. What steps can I take to manage my premiums?
To keep insurance premiums manageable, consider the following strategies:
- Work with a broker experienced in your industry to identify cost-saving opportunities.
- Start the renewal process well before your policy expires to compare quotes from multiple providers.
- Bundle policies (e.g., liability and property insurance) with a single insurer to access discounts.
- Opt for higher deductibles to lower your premiums, provided you’re comfortable covering more out-of-pocket costs during a claim.
- Regularly review your policy, especially after significant business changes, to ensure you have the best possible coverage.
3. How are business insurance rates determined?
Commercial insurers calculate premiums based on various factors, including:
- The type of business you operate.
- The products or services you offer.
- Your risk management practices and claims history.
Again, we at Lane’s will find you an insurance broker among our talented staff who is familiar with your industry to help you navigate these factors and recommend suitable coverages to address your business’s risks properly.
4. What is a deductible and how does it affect my premium?
A deductible is the portion of a claim that you pay out of pocket before your insurance kicks in. Opting for a higher deductible typically lowers your premium, but it’s important to weigh these savings against the potential financial burden during a claim. Choose a deductible amount that aligns with your budget and risk tolerance.
5. What does business interruption insurance cover? Do I need it?
Business interruption insurance protects your income and helps cover ongoing expenses during a temporary closure due to an insured loss (for example, a fire). It can be added to a commercial property insurance policy, with three main options:
- Gross earnings: Covers income loss until damaged property or inventory is repaired or replaced.
- Profits form: Pays until your business returns to its pre-interruption level.
- Extra expense: Covers costs to operate in a temporary location during repairs.
Work with your broker to determine your business’s operational risks and whether business interruption coverage is necessary.
6. Will my homeowner’s policy cover my home-based business?
If you operate a business from your home, your homeowner’s policy likely doesn’t provide adequate coverage. Depending on your business’s revenue, stock levels, and customer interactions, you may need separate business insurance.
Liability is often the greatest concern for home-based businesses. For example, if a client is injured on your property, a commercial liability policy would cover legal costs and damages. Most homeowner’s policies exclude such scenarios.
Brokers work for you and your company
Partnering with an experienced commercial insurance broker is one of the best ways to navigate the ever-evolving insurance landscape. Brokers can help you understand complex coverage options, identify cost-saving opportunities, and ensure your policies align with your business’s needs.
As Canada’s commercial insurance market becomes more competitive, businesses have a greater opportunity to secure favourable rates and comprehensive coverage. By staying informed and working with a trusted insurance professional, you can position your business for success and resilience in an ever-changing market. With offices in Calgary, Banff, Edmonton, and across Alberta, we at Lane’s work hard to find you the very best commercial insurance coverage at the very best rates.
