Report highlights lack of coverage for common risks for thousands of firms
Hundreds of thousands of small businesses across Canada could be at risk from a lack of appropriate insurance coverage, according to TD Insurance.
The firm says that 40% of participants in its recent poll said they do not have business insurance, leaving them exposed to business disruption and financial loss. Of those without cover almost half stated that they don’t need it with 30% believing it’s not necessary if they do not have employees.
However, the survey reveals the top concerns of small business owners including business interruption (19%), damage to property and contents (10% but 18% among those in the Prairies), and employee safety (7%).
"With over 2 million small businesses in Canada ranging in size, profits and industry, there is no one size fits all approach to business insurance," said Tang Trang, VP, Product and Pricing, Small Business Insurance, TD Insurance. "The unthinkable can happen and no business wants to close their doors to their customers. It's essential business owners find the right insurance policy that meets their unique needs and gets them back to serving their customers as quickly as possible."
Even among those businesses that see the value of insurance, cost is often an issue, especially with small firms already facing significant extra costs and debts. But Trang says this approach can lead to high costs later on.
"It can be tempting to forego insurance to cope with economic pressures, but for a small grocery store whose customer slips and falls on its property or a bakery who has to shut down due to significant fire damage, the financial loss could greatly outweigh the cost of protecting your business from the unexpected," Trang said.
The report also noted the importance of ensuring changes are reflected in insurance coverage. These can include moving location or buying new equipment.
While 60% of respondents have consulted with a licensed insurance advisor about their business, 21% said they have no intention of doing so and only 32% of those that have review their policy regularly to ensure they are correctly covered.
