The cost of insurance for Inn on the Lake in Fall River, Nova Scotia went up 32 per cent for 2020-21. (Inn on the Lake)

Small businesses face insurance price hikes or are refused coverage

More than half of small businesses in Canada have seen increases in the cost of insurance premiums in the past year and some cannot get coverage at all, says the Canadian Federation of Independent Business (CFIB). Without insurance coverage businesses cannot legally operate. Several business say the pandemic has incresed their risk of general liability.

‘I’m terrified,’ says inn co-owner

I spoke with Ron Nelson who, with his wife owns The Inn on the Lake in Fall River in the eastern province of Nova Scotia. The insurance on their inn went from $41,000 in 2016-17 to $54,330 for 2020-2021. Nelson had to change companies to get the new rate and agree to a personal credit check which had never happened before. The price hike of 32 per cent is bad enough by itself, said Nelson but worse given that business is down and costs are up.

“This is a particular hardship,” said Nelson. “My bookings are down to a little less than 50 per cent and all the big Christmas parties we usually have are not going to happen this year. Taxes are up because of a very good year last year. Costs are skyrocketing for things like foodstuffs and service industries have taken to charging two to three per cent on their service bills. My cupboard is bare…I am terrified if there is a second wave of the pandemic.” The province of Nova Scotia has, so far, not had the dramatic increases in COVID-19 cases that provinces west of it are experiencing as a second wave of the pandemic.

The winter month of January is always difficult for inns, but it will be worse given all the Christmas cancellations. (Inn on the Lake)

Nine per cent could not get insurance at all

An online survey conducted for the federation shows that of the businesses that reported their premiums went up by a-quarter or more, 25 per cent were in hospitality, 23 per cent in transportation and 22 per cent in agriculture. Nearly nine per cent of all business owners said they were unable to find any insurance company willing to cover them in the last 12 months.

The federation is asking provincial governments to provide liability immunity to all businesses that are following government guidelines for the duration of the pandemic. It is also asking the insurance industry to adopt a moratorium on cost increases and policy cancellations during this time.

The Canadian Federation of Independent Business is the country’s largest association of small and medium-sized enterprises with 110,000 members.

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