January 18, 2017 by April Scott-Clarke
Small businesses in Canada outnumber large enterprises, and by a big margin. According to numbers from Statistics Canada that were released in June 2016, there are 1.14 million small businesses across the nation and 21,000 medium-size businesses, compared to only 2,900 large enterprises.
However, in the insurance world, small business clients have typically been under-served, with few products or services geared specifically toward their needs at prices that make sense for them.
In the past year, however insurance providers have perked up their responses to broker inquiries and feedback, and have proceeded to fill this gap in the market. Insurers are creating new products, as well as providing more access to existing ones, and tweaking them to suit the needs of small businesses. Insurers have also recognized that small businesses have specific needs and wants when it comes to how their coverage is acquired and delivered, and are attempting to make this process easier for brokers and their clients. Considering that small and medium-size businesses contribute to more than half of Canada’s GDP, targeting small business is a smart move in this competitive insurance market.
If finding the right coverage for a small biz client has been a challenge, here are a few options you may not have known existed.
In April 2016, Northbridge Insurance launched Northbridge Insurance Go, a solution for small businesses that covers property and liability needs. The package also includes legal expense coverage up to $50,000 and access to a risk specialist, and it carries no penalties should coverage need to be revamped or even cancelled.
Andrea Bucek, vice-president, distribution, for Northbridge Insurance, describes this package as a “one-stop solution for small business” but emphasizes its flexibility, with the ability to add coverages like automobile, errors and omissions, and cyber—with the two latter areas becoming a growing concern. “It’s not an out-of-the-box solution,” she says. “There is the ability to customize it…we can tailor it to the needs of the clients.”
Prior to April, Bucek says that Northbridge would have written small business customers as part of the company’s commercial appetite, “but now we have a dedicated team [for small business].” Adding to the flexibility of the product, Northbridge Insurance Go is delivered electronically to brokers and clients.
“Research tells us that small businesses are very much time-starved….We are focusing on what our broker partners told us matters most: speed of service, a simple insurance solution with the ability to tailor the package,” she says. “We use an e-doc solution with commercial e-docs to get the policies in their hands quickly.”
But Northbridge isn’t the only insurer with digital offerings.
One of the appealing features of uBiz— outside of the digital aspect—is that it’s built on an à la carte model specifically designed for home-based and micro businesses.
Gore Mutual Insurance has focused on small business for many years, providing solutions that will help “small businesses survive and thrive,” says Anna McCrindell, vice-president of underwriting at Gore. The company knows exactly how limited resources can be—in terms of employees and finances—which is why Gore launched uBiz last October.
uBiz is a fully e-commerce insurance platform. Gore was the first in the Canadian market to offer a fully digital solution, and did so in partnership with eight brokers. The platform plugs into the broker website, providing a seamless experience that makes it easy to use for everyone involved. McCrindell admits that going this route was more challenging, but says doing so has resulted in a more meaningful service. “It’s different because customers go to the broker’s website and get quotes by answering seven simple questions,” she explains. Customers can get a quote, make changes (either adding or decreasing coverage) and pay online. Insurance certificates and policies are immediately sent by email, giving clients instant coverage.
One of the appealing features of uBiz—outside of the digital aspect—is that it’s built on an à la carte model specifically designed for home-based and micro-businesses. “Often [these businesses] are sold a whole package that they aren’t interested in purchasing,” says McCrindell. “We aren’t forcing a whole package. We’ll sell people just commercial general liability, for example.” Clients can add on home office contents and legal expense coverage if they choose.
Although uBiz has been on the market for a year, McCrindell says Gore hasn’t aggressively marketed the product yet. “We’ve been really pleased with the customers we’ve been getting,” she says. Currently, uBiz is offered exclusively through the eight brokers it launched with—all of whom were chosen because of their experience with e-commerce. That said, Gore is currently in talks with other brokers as it looks to expand access to uBiz.
Burns and Wilcox Canada is another insurer that operates outside the box. “We are not an in-the-box company,” says Jodie Kaufman Davis, corporate vice-president and managing director. “We can work with our retail broker clients to provide the small business needs,” she says. “We work with many different markets, and, because of our experience, we are able to put together the right coverage. We’ll take any risk and look at it and assess it; there’s a new risk every day that we see.”
The company has broad centres of excellence ranging from environmental to marine, to transportation, and they service a variety of sectors, but Burns & Wilcox’s access to cyber-liability coverage is one that brokers should take note of. “We have a unique program for cyber liability,” Kaufman Davis says. “I think companies are seeing the exposures, the potential for cyber attacks and data breaches. The more information a company holds, the higher its exposure—credit card details, health info, etcetera. It could be detrimental to a company.” Pawn shops, religious institutes, grocery stores and other retail outlets—even construction businesses— can hold cyber risks. Some key features of this product include coverage for third-party claims and first-party responsibilities, forensics costs, credit protection (credit monitoring services, credit freezes and fraud alerts), business interruption expenses and cyber-extortion costs. Premiums are based on the individual industry.
Kaufman Davis points out that it can be harder for smaller businesses to get this type of coverage because “small businesses often go to small brokers that have less access to the market,” but access isn’t an issue at Burns & Wilcox. “We’re always looking to be innovative and provide unique opportunities,” she says. “We don’t just have a list of products. We create products and use our expertise to do so quickly.”
Small businesses account for 97.9% of all firms in Canada. While births and deaths can vary from year to year, StatsCan numbers show that mom-and-pop shops are growing in number and size. From consultants to hairstylists and dog walkers, the Canadian entrepreneurial spirit is strong. However, the public’s understanding of insurance and coverage needs can often be weak.
As you educate clients on what’s available in the market, insurers are putting an increased focus on small businesses, which will enable brokers to offer clients customizable solutions that are simple, flexible and fast.
Copyright © 2016 Transcontinental Media G.P. This article first appeared in the October 2016 edition of Canadian Insurance Top Broker magazine
This story was originally published by Canadian Insurance Top Broker.