Canadian Underwriter

Why some small business owners don’t have insurance

August 9, 2022   by Alyssa DiSabatino

Illustration of a woman opening the door of a small business with light fixtures hanging on the inside of the window and a bike and other floral decor on the outside

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Almost 40% of small business owners say they don’t have a business insurance policy, and another 25% say they don’t think they need it, finds a recent survey of 222 small business owners and self-employed professionals in Canada.  

The survey also asked respondents if they have a business insurance policy and how often they compare rates, and a large percentage seem savvy to finding a better rate.  

Forty percent say they shop around for insurance annually, while 13% do so once every few years, finds small business insurer Zensurance’s Small Business Confidence Index. A further 7% of respondents say they never do.  

Among the 40% who don’t have a business insurance policy, the reasoning varies. One quarter (25%) feel they don’t need it, while others say they don’t because it costs too much (16%). Another 16% say it’s because they have personal home and auto insurance, while another 13% admit they haven’t thought about it. 

“Some of the views small businesses have on business insurance are troubling,” notes Danish Yusuf, founder and CEO of Zensurance, in a press release. They may not be aware of the risks they are taking that could prove to be financially catastrophic without an insurance policy.” 

The report also advises business owners not to conflate home and auto insurance with business insurance. “The personal insurance coverage you have for your home or condo and vehicle is not designed to cover you for accidents and incidents related to business activities. Even if you have a home-based business, your residential coverage may not be sufficient for your risks,” it reads.  

The survey also looked at what factors influenced small business owners to pursue an insurance policy. Among those who have a policy, 15% say it’s a legal or regulatory requirement for their industry or profession. Thirteen percent say an insurance broker influenced them, while another 13% say they were encouraged by family, friends or colleagues. Eight percent say a mentor encouraged them, while 3% cite advertisements, and 2% say stories in the media motivated them to get a policy.  

Respondents were surveyed on their reasons for confidence and concerns for their business in the coming year, and while 60% of respondents feel confident for the future, 46% say revenue was either down or about the same in the first half of 2022 compared to 2021. Fifty-two percent admit their businesses cannot afford to take on more debt to fund necessary projects or initiatives.   

Business owners’ biggest concerns include the effect of inflation (51%), followed by the cost of gasoline (16%) and managing cash flow (13%). Only 6% cite the cost of business insurance as a concern, while another 2% are worried about the ability to get insurance. Five percent worry about supply chain reliability, while 9% say none of the above.  


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