More than half of small businesses have seen their insurance premiums increase over the past 12 months, with one in six reporting an increase of 25 per cent or more, according to the latest survey results by the Canadian Federation of Independent Business (CFIB). CFIB is calling on the insurance industry and provincial governments to ensure small businesses have access to affordable coverage.
“Businesses can’t legally operate without insurance, but many have been priced out or are unable to find an insurer willing to cover them,” said Corinne Pohlmann, Senior Vice-President of National Affairs at CFIB. “It would be in everyone’s interest—business owners and insurance providers—to maintain those relationships and work together rather than shutting out a large sector of the economy from this essential service. We are pleased that the industry has tried to step up to find solutions but the situation remains dire for too many small businesses.”
Businesses in the hospitality (25 per cent), transportation (23 per cent) and agriculture (22 per cent) sectors were more likely to report a premium hike of 25 per cent or more in the past year. Nearly a tenth (9 per cent) of all businesses say they were not able to find an insurer willing to offer coverage for their business needs in the past 12 months, but that number rises to 14 per cent of hospitality businesses and 12 per cent of those in transportation.
The pandemic has exacerbated small businesses’ insurance needs: 40 per cent say COVID-19 has increased their risk of general liability. CFIB has kept governments and the insurance industry informed about the needs of small businesses and will be presenting its latest survey findings today at the Insurance Bureau of Canada’s National Commercial Insurance Task Force.
To move forward, CFIB recommends:
- To provincial governments: Provide liability immunity during the pandemic to all businesses performing services in accordance with applicable public health guidelines while acting in good faith.
- To the insurance industry: Adopt a moratorium on cost increases and policy cancellations during the pandemic.
“The insurance industry is willing to listen to small business owners’ concerns and are trying to provide solutions with some providers proactively offering relief measures to their clients,” added Pohlmann. “I encourage businesses to call their insurance broker and see if there is anything available for them. At the same time, CFIB will continue working to ensure fairness for those still struggling to access coverage.”
Source for CFIB data
Preliminary results for COVID-19 recovery survey – October 2020, online survey started October 22, 2020, n = 3,939. For comparison purposes, a probability sample with the same number of respondents would have a margin of error of +/-1.6%, 19 times out of 20.
SOURCE Canadian Federation of Independent Business