The financial health and wellness of their businesses have a majority of Canadian small business owners and self-employed professionals overwhelmingly worried, with 89% of respondents to Zensurance’s national Small Business Confidence Index 2023 online survey identifying inflation as their top concern.

Among the other top issues worrying business owners are rising interest rates and the need to increase their prices (both 80%), the cost of gasoline (78%), and effectively managing their cash flow (70%). Also noteworthy, 63% cite mitigating their liability risks and the cost of business insurance as prominent concerns.

Small business survey results 2023.
Top concerns of Canadian small business owners.

While the ravages of inflation and concerns about the economy have been making headlines for months, the focus is often on how it’s affecting consumers. That nearly 98% of the 1.21 million businesses in Canada are small businesses employing 8.2 million people (68% of the total private labour workforce), the Zensurance survey results provide a worrisome view of how the backbone of the Canadian economy is holding up, particularly after the impact of the pandemic.

On that point, when asked what impact the state of the economy has had on their businesses in the first half of 2023, the majority of respondents (60%) say it’s had a negative impact, with 24% of respondents in Ontario saying the effects on their businesses are significantly negative – the highest tally regionally. 

Nationally, another 27% say the state of the economy has had little to no impact, and only 12% say it’s been positive.

Impact of economy on Canadian business in first half of 2023

Preventing Accidents and Mitigating Liability Risks Rank High

The survey finds small business owners also recognize the value of being proactive in preventing costly accidents and mitigating their liability risks, with 63% citing mitigating their liability risks as a top concern, while 37% do not. 

Business owners who take measures to reduce the likelihood of filing an insurance claim are wise, as it can help lower the risk of potential lawsuits, and keep their insurance premiums low.

Among the top emergency preparedness actions business owners take include having a first-aid kit (83%) and routinely conducting necessary maintenance to the tools and equipment they own (79%) and to their commercial properties (74%). Other efforts include:

  • 70% regularly remove debris and clutter near doorways and areas customers frequent.
  • 64% train their employees on health and safety best practices.
  • 52% regularly encrypt and back up mission-critical data to cloud storage.
  • 48% have monitored security and fire surveillance systems.
  • 42% invest in cybersecurity protection.
  • 31% have disaster recovery and business continuity plans.
  • 28% have a sump pump and a backup power generator.
Preventing accidents and mitigating liability risks

What Small Business Owners Think About Business Insurance

We also queried Canadian small business owners about their views on business insurance. Most of our survey’s respondents say they are insured (87%), while 13% say they do not have business insurance.

Aiming to understand what business owners who invest in their business’s wellness and financial security by purchasing insurance rank as the most influential factors, a majority (60%) cite the price of a policy, 49% identify the amount of coverage a policy provides, and 31% say protecting their business’s finances and reputation.

We also asked the respondents who do not have insurance why they don’t have a policy. Most (48%) say they don’t think they need it, 30% don’t because they have personal home and auto insurance, and 19% say they haven’t thought about it or because it costs too much. Another 7% claim it takes too long to get insured; they don’t trust insurance companies or say insurers don’t pay claims.

Why business owners have or don't have insurance

Interestingly, when asked how they would pay for expensive damages or losses to their businesses without an insurance policy*:

  • 48% say they don’t believe there is a potential for a costly loss or damage to their business. 
  • 22% admit they don’t know what they would do.
  • 19% say they have an adequate amount of money saved to cover expensive damage or loss. 
  • 11% say they’d declare bankruptcy.

These findings suggest a disconnect among some owners between maintaining their business’s financial health and wellness and how insurance contributes to those goals.

How business owners would pay for damages or losses without insurance

5 Facts About Business Insurance

Business insurance protects Canadian business owners, entrepreneurs, contractors, and self-employed professionals against common risks by shielding them from the financial costs of a disaster, accident, or injury to a third party. 

Here are five facts about business insurance and why it’s worthwhile for business owners to purchase a policy:

1. Expensive Accidents or Lawsuits Far Outweigh the Cost of a Policy

Imagine a fire unexpectedly ignites overnight and rips through your office, warehouse, or retail store, damaging or destroying your furnishings, electronics, office equipment, inventory and merchandise and inflicting significant damage to the building. 

The cost to repair or replace everything the flames and smoke damage can easily run into hundreds of thousands of dollars. Meanwhile, your business is shuttered until repairs are completed and all your contents replaced. 

Without insurance, such a scenario could spell the end of your business and force you into bankruptcy. The 48% of business owners who don’t have insurance because they don’t believe there is a potential for an expensive loss or damage to their businesses are taking a significant gamble.

Moreover, defending your business in a lawsuit may cost $10,000 at a minimum, even if that lawsuit is frivolous. A 2022 survey of Canadian small businesses found seven out of 10 dealt with a legal dispute in the last three years, representing a 230% increase from 2015.

2. Personal Home and Auto Insurance Are Not Substitutes

Although important, personal home insurance and private-passenger car insurance are not designed to cover business owners and self-employed professionals or business-related liabilities. Even for home-based businesses, homeowner or condo insurance policies typically have insufficient coverage limits or no coverage at all for business-related liabilities or the scope of the business use endorsement under a home insurance policy may not provide adequate coverage.

3. Not All Insurance Policies Are Priced the Same

Different insurance companies charge various amounts for the policies they provide. As in other industries, insurers compete to sell their policies to business owners. 

That’s why shopping around annually and reviewing your policy before renewing it is highly recommended. As small businesses grow and change year-over-year, your policy should reflect and account for those changes. A Zensurance broker can help you review your coverage to ensure you’re adequately covered and shop for insurance on your behalf to find the protection you need at an affordable price. 

4. A Business Insurance Broker Can Help Keep Your Insurance Bill Low

Business insurance brokers are insurance and risk mitigation experts. They don’t work for an insurance company. They work for you. After completing an online application for a free quote from Zensurance, our brokers customize your policy based on your specific needs. 

They do that by partnering with you to learn about your business and offer guidance and recommendations on the coverage you need, how to lower your liability risks, advice on the limits your policy should have, and through our partner network of over 50 insurance providers, get the low-cost policy you require.

5. Business Insurance Is Critical for Maintaining Your Company’s Financial Wellness

When considering any small business’s financial health and wellness, it’s critical to understand that insurance protects business owners and self-employed professionals against risks and financial losses.

From commercial property insurance covering losses due to fires, natural disasters, water damage, theft, and vandalism, general liability insurance to safeguard against the costs of third-party bodily injury or property damage, professional liability insurance to cover allegations of professional negligence, or cyber liability insurance to help deal with the fallout of a data breach or cyber-attack, a customized business insurance policy can serve as the backbone for any company’s or professional’s risk mitigation and business continuity strategy.

*Based on a sample of n=27 business owners without business insurance.

About the Zensurance Small Business Confidence Index

The Zensurance Small Business Confidence Index was conducted online from June 5 to June 12, 2023, polling 205 English-speaking Canadians who are self-employed, entrepreneurs, or small business owners. For comparison purposes only, a sample of this size would yield a margin of error of +/- 6.8 percentage points at a 95% confidence level.

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About the Author: Liam Lahey

Liam is the Content Marketing Manager at Zensurance. A writer and editor for more than 20 years, he has been published in several newspapers and magazines, including Yahoo! Canada Finance, Metroland Media, IT World Canada and others.