Business Insurance in Canada: A Guide for Newcomers
Are you starting a new business in Canada? Congratulations – that’s something to be proud of! As you embrace this new venture, you’ll be navigating new systems and taking on more responsibilities, all while exploring a new business environment. For newcomers, understanding how to protect the business you’ve worked hard to build is an important part of the journey.
Business insurance is a valuable option to consider for your new business. It can help mitigate the impact of an unexpected event and allow you to focus on growing your business.
In this article, you’ll find an overview of what business insurance is, why it matters for small businesses, and key points to keep in mind when choosing a policy. We’ll also look at a few types of insurance options available in Canada.[1]
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Business Insurance: A Simple Explanation
Think of business insurance like an umbrella. You may not need it every day, but when a storm hits, it’s there to keep you covered. For a business, those “storms” could be things like damage to your shop, a customer lawsuit, or a natural disaster that forces you to temporarily close. Having insurance may help with the financial costs, so your business can keep running when the unexpected happens.
In Canada, business insurance isn’t one-size-fits-all, it’s more like tailoring a suit. The style and fit depend on the type of business you run, how big it is, and the risks you face. A corner café, for example, will need different protection than an electrician, a manufacturing operation, or a home-based management consultant. The first step is to understand the unique risks in your field, so you can find coverage that fits your business.
Why Business Insurance Matters
Starting a business in Canada often requires a significant investment of money, time, and energy. For newcomers, that effort may feel even more valuable. Business insurance is one way to help protect what you’ve built so you can keep moving forward even if the unexpected happens.
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What to Think About Before Getting Business Insurance
Choosing business insurance isn’t just about picking a policy. It’s about finding coverage that fits your unique business. Here are a few things to keep in mind:
Budget and Balance
Insurance premiums can vary depending on many factors, including the nature of your business, claims history, and the type of coverage you select. A licensed insurance advisor can help by reviewing your business needs and discussing the best options to protect your business without overspending.
Know the Rules
Insurance options and legal requirements can vary by industry and province in Canada. For example, if you have employees, workers’ compensation coverage may be mandatory. Make sure you know the legal requirements, so your business stays compliant.
Understand Your Risks
Every business faces its own set of challenges. A restaurant owner might worry about having to close due to a weather-related event, while a physiotherapist may be concerned about being sued by a patient if injured on their premises. Understanding the specific risks associated with your business and the coverage available will help you decide which options make sense.
Policy Review
Regularly review your policy and look closely at your policy limits and deductibles. A higher deductible might reduce your monthly premium, but it could also mean paying more out of pocket if you need to make a claim. Many insurers also offer a discount for combining policies, so having multiple policies with one insurer can often unlock bundling discounts and simplify insurance management.
Compare Your Options
Not all insurance policies are the same. Take time to shop around and ask questions to make sure you understand what’s covered. It’s important to speak with a licensed advisor, whether it’s a broker or direct insurer, to understand your options and find a policy that fits your needs.
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Types of Business Insurance to Choose From
So, which insurance will be right for your business? Every business is unique, that is why it’s important to find the right coverage that fits your unique needs. Here are a few common types of business insurance coverages in Canada:
Commercial General Liability Insurance (CGL)
This coverage protects your business from financial losses caused by third-party claims involving bodily injury, property damage, as well as personal and advertising injuries that could arise from your products, services, premises, or operations. For example, if a customer slips and falls in your grocery store and you are found liable, CGL coverage could cover related medical expenses, legal fees, and settlement costs.
Professional Liability Insurance
Sometimes called errors and omissions (E&O) insurance, this coverage protects your business against claims of negligence, mistakes, or failure to deliver promised professional services that may cause financial harm to a client. If a client claims your work caused them financial harm—say, as a consultant, lawyer, or accountant—this insurance may help with legal costs and the associated settlement from the lawsuit. It’s about protecting both your finances and reputation.
Commercial Auto Insurance
If you or your employees operate a vehicle for your business, you’ll want to consider commercial auto insurance. It covers company cars, vans, or trucks in the event of an accident, theft, or damage. This type of coverage usually includes repairs, medical expenses, and legal fees. For newcomers still adjusting to Canadian roads and weather, insurance can help reduce uncertainty and provide protection against the unexpected.
Commercial Property Insurance
Whether you own or rent your space, commercial property insurance helps protect your physical assets, like buildings, furniture, inventory, or equipment, from covered losses. If a fire, theft, vandalism, or certain natural disasters cause damage, this coverage may help cover repairs or replacements. In addition, business interruption coverage can also be added to this policy, which covers lost income and extra expenses if your business is forced to temporarily close due to a covered event. This support can help keep your business financially steady even if the unexpected were to happen.
Running a small business often means wearing many hats, from managing customers to keeping the lights on. For newcomers in Canada, there’s also the added layer of navigating a new system and way of doing business.
Insurance can help take some of the weight off your shoulders. The right coverage can act like a safety net to support you when the unexpected happens. By learning what options exist and choosing protection that fits your unique situation, you give your business more stability, allowing you to focus on growing your new business in Canada.
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Why Choose TD?
More than 160 years of helping Canadians:
TD has a proud history of delivering financial solutions to Canadians for more than 160 years. TD also brings a century of experience helping newcomers navigate the unique challenges of the Canadian banking system.
With over a thousand branches, and the ability to also serve you in more than 80 different languages, TD has become one of the largest and most trusted banks in Canada, now serving 16 million Canadians.
TD offers online support and resources of interest to newcomers on topics such as banking basics, moving to Canada, credit score essentials, and more. TD is open longer hours for your convenience and has thousands of ATMs across Canada to help you take care of your everyday banking needs quickly and easily.
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[1] Insurance Bureau of Canada, Business Insurance Basics, Toronto, Insurance Bureau of Canada, 2025, https://www.ibc.ca/insurance-basics/business, (accessed 19 August 2025)
