Is your insurance (or lack thereof) you putting your operations at risk?
Convenience, gas, car wash operators and suppliers conduct business in a dynamic environment with unique risks, from theft and fire to liability concerns. Despite these vulnerabilities, a significant portion of small businesses are woefully underinsured and exposing themselves to unnecessary risk and financial hardship.
Nearly one in five small business owners say their biggest liability is having their business interrupted, however almost 40% of them do not have business insurance, a key tool in protecting their livelihood and people should the unexpected happen, according to a recent TD Insurance survey conducted by Maru Public Opinion.
“With over 2 million small businesses in Canada ranging in size, profits and industry, there is no one size fits all approach to business insurance,” says Tang Trang, vice-president, product and pricing, small business insurance, TD Insurance. “The unthinkable can happen and no business wants to close their doors to their customers. It's essential business owners find the right insurance policy that meets their unique needs and gets them back to serving their customers as quickly as possible.”
Top liability concerns among small businesses surveyed include:
· Business interruption (19%): This could include a fire or flood leading to a suspension of business while repairs are made.
· Damage to property and contents (10%) *note this is higher (18%) among Prairie businesses: This could include a flood in a basement and damaged inventory.
· Employee safety (7%): This could include an employee injury on site, such as a fall.
The case for business insurance
Trang emphasizes that business insurance is not just a protective measure, but a critical tool for long-term success. As for the 40% of small business owners that don't have insurance, he says “this isn’t surprising, as many business owners prioritize growth over protection or find insurance policies too complex and costly.”
Indeed, with the overall costs of doing business continuing to rise, 36% of small businesses surveyed mentioned cost as a reason for not having insurance.
"It can be tempting to forego insurance to cope with economic pressures, but for a small store whose customer slips and falls on its property or a bakery who has to shut down due to significant fire damage, the financial loss could greatly outweigh the cost of protecting your business from the unexpected," says Trang.
Without adequate coverage, operators and vendors risk severe financial loss in the event of common incidents such as:
- Theft or vandalism: Inventory and equipment can be costly to replace.
- Fires or natural disasters: These events could lead to significant damage and downtime.
- Liability claims: Customer injuries, like slips and falls, could result in legal and medical expenses.
“Losing operational days can mean losing revenue and, in some cases, permanent closure,” says Trang. Between lack of awareness and cost concerns, however, SMEs can easily fall through the cracks, focusing on the here and now and assuming nothing will go wrong—until it goes.
Where to start
For convenience store operators, Trang recommends key types of coverage:
- Commercial Property Insurance: Covers inventory, equipment, and property.
- General Liability Insurance: Protects against lawsuits from customer injuries or damages.
- Business Interruption Insurance: Provides financial support during operational downtime due to covered events.
- Commercial Auto Insurance: Necessary for stores using vehicles for inventory transportation.
“There’s no one-size-fits-all solution. Each store has unique risks depending on location, inventory and operations,” says Trang, who advises working with a licensed insurance advisor to tailor policies to specific business needs. A good place to start, however, is by obtaining a digital quote—for instance, TD’s Digital Quoter tool provides customized quotes for business owners.
While it's encouraging that 60% of small businesses surveyed have consulted with a licensed insurance advisor about their business, there remain 21% who have no intention of doing so, and only 32% who review their existing policy regularly.
As the economic landscape continues to evolve, so do the needs of the convenience channel. From moving to a new retail location, buying new equipment, or launching a new service offering, from foodservice to EVs and categories like beverage alcohol, it is important business owners review their insurance policy and speak with a professional who understands their unique business needs.
Overcoming barriers: Making insurance accessible
In addition to proactively understanding the insurance needs of your business, there are several measures to prevent having to temporarily close your doors.
"Establishing safety and emergency protocols and training employees on them regularly, conducting safety inspections and addressing any issues identified, and installing anti-theft devices for their vehicle, are just a few steps small businesses can take to protect what they've worked so hard to build,” says Trang.
To make insurance more affordable and practical:
- Bundle policies: Combining property, liability, and auto insurance can result in significant discounts.
- Implement safety measures: Installing security systems, fire alarms, and proper safety protocols can reduce premiums. “Workplace safety measures not only lower risks but also make insurance more affordable,” says Trang.
- Regularly review policies: As businesses grow, insurance needs change. “Adding locations, increasing inventory, or hiring employees are all triggers to review your policy,” Trang advises.
- Be proactive with record keeping: “Floods, fires, and theft are becoming more frequent, making it critical for businesses to stay proactive,” Trang says. Record-keeping and maintaining a detailed inventory can streamline claims processes and reduce downtime during crises.
Business insurance provides more than just financial protection—it offers peace of mind, says Trang concludes, “Having insurance ensures you can focus on growing your business, knowing you’re prepared for the unexpected.”
