Running a business in Montreal is expensive. Business owners already face high municipal taxes, rising labour costs, and inflation. One fixed cost that often bothers owners more than any other is commercial insurance.
Many business owners treat their insurance bill as an unavoidable tax. They pay the renewal each year without questioning it, assuming the price is fixed.
This is incorrect.
Your insurance premium is based on the risk you pose. If you can show the insurance company that your business is safe and well-managed, they will charge you less.
In this article, we will discuss some ways by which you can lower your commercial premiums.
1. Broker vs. Agent: The Most Important Decision
The most important factor affecting your insurance price is not the policy, but who you buy it from. Understanding the difference between a captive agent and an independent broker can save you significant money.
The Captive Agent:
A captive agent works for one insurance company. You can think of this like an Apple Store; they can only sell you Apple products.
The Limitation: If that company raises its prices, the agent cannot offer alternatives because they work for the insurer, not for you.
The Independent Broker:
An independent broker works for you, not for any single insurance company. Think of this like Amazon; they provide products from many different brands.
The Qubit Advantage: An independent broker in Montreal like Qubit can get quotes from 10 or more insurance companies, including Intact, Northbridge, Economical, Lloyd's, and Wawanesa. When companies compete for your business, your premium goes down.
How to Test Your Provider: Ask your insurance representative this question: "Can you get me quotes from 10 different companies?" If they say no, you are likely paying too much.
If you need help choosing the right broker, read our guide on How to Find an Insurance Broker in Montreal.
2. Building Upgrades That Lower Your Premium
Insurance companies rely on data to assess risk. They charge more for buildings with old or unsafe features. Fixing these specific problems can lower your premium significantly.
Upgrade Your Electrical System
Old wiring systems, especially knob-and-tube or aluminum wiring, are viewed as major fire hazards by insurance companies.
- The Action: Upgrade your building to copper wiring with a modern electrical panel.
- The Cost: Typically between 8,000 and 15,000 dollars.
- The Benefit: Without this upgrade, you may be placed in high-risk insurance markets that cost two to three times more than standard rates. The upgrade often pays for itself within a few years through lower premiums.
Install a Backwater Valve
Water damage is the number one cause of insurance claims in Quebec. During heavy rain, city sewers can become overwhelmed and push sewage back into your basement.
- The Action: Have a plumber install a backwater valve to stop this backflow.
- The Cost: Approximately 2,500 dollars.
- The Benefit: Many insurers offer discounts for this device. The City of Montreal also provides the RénoPlex grant to help cover installation costs.
Get Your Roof Professionally Inspected
Quebec winters are harsh on roofs. The weight of snow and ice causes damage over time. Insurers often charge extra for older roofs or may limit water damage coverage.
- The Action: Pay for a professional roof inspection report.
- The Cost: About 500 dollars.
- The Benefit: If the inspection confirms your roof is in good condition, you can often negotiate the removal of surcharges that add 15 to 20 percent to your policy.
3. The Deductible Strategy
A deductible is the amount you pay out of pocket before insurance covers the rest. Many businesses choose a low deductible, such as 1,000 dollars, because it seems safer. In reality, this choice often increases your total cost.
Why Low Deductibles Cost More
If you experience a small loss, such as an 800 dollar incident, you should avoid filing a claim. Small claims removes your claims-free discount, which can reduce your premium by 15 to 20 percent for several years. If you are not filing claims for minor losses, paying an extra premium for a low deductible provides no financial benefit.
The Smarter Approach - Raise your deductible to 2,500 or 5,000 dollars.
- The Result: Your premium decreases right away because insurers reward clients who take responsibility for smaller risks.
- The Strategy: Put the money you save into an emergency fund. This creates a simple financial cushion that covers the higher deductible if you ever need to make a claim.
4. Managing Operational Risks
How you manage your daily operations has a direct impact on your insurance costs. Strong protocols for vehicles, equipment, and property maintenance can significantly improve your risk profile.
Commercial Vehicle Insurance
If your business uses delivery vans or trucks, commercial auto insurance can become a major expense. Even one employee with a poor driving record can raise the cost of your entire fleet.
- The Protocol: Before hiring any driver, request their official driving record (driver abstract) from the SAAQ. The fee is about 15 dollars.
- The Benefit: Hiring safe, experienced drivers helps keep your fleet insurance affordable. If you already have drivers with violations, consider assigning them to roles that do not involve driving.
Read More: 12 Key Factors That Influence Your Commercial Truck Insurance Premium
Stop Insuring "Ghost Assets."
Many businesses continue insuring equipment at its original purchase price long after it has depreciated. For example, machinery purchased for 50,000 dollars may now be worth only 10,000 dollars.
- The Protocol: Review your equipment list every year. Update each item with its current value, not the amount you paid when it was new.
- The Benefit: You avoid paying premiums for coverage you would never receive, since insurers only reimburse the actual value at the time of loss.
Keep a Snow Removal Log
In Quebec, you are legally responsible if someone slips on ice outside your business. Slip and fall claims are common and can be very expensive.
- The Protocol: Keep a simple log, either digital or on paper, showing when snow was cleared and when salt was applied. Include dates, times, and the actions taken.
- The Benefit: If someone files a claim, this record demonstrates that you maintained your property responsibly. Insurers value this documentation because it proves you are a defensible, low-risk client.
5. Addressing Hidden Risks
Reducing your premium is important, but making sure you are covered for modern risks is just as important. Many small businesses overlook these two areas.
Cyber Attacks and Law 25
Hackers often target small businesses because their security is usually weaker than what big companies have. Under Quebec's Law 25, if you do not protect customer information properly, you can face large fines.
- The Solution: Add cyber risk insurance to your policy. It can cover data recovery, legal fees, and the cost of notifying customers after a breach.
- The Requirement: Most insurers now require multi-factor authentication (MFA) on your email and computer systems before giving you a cyber insurance quote.
Business Interruption Coverage
If your building burns down, property insurance pays to rebuild the structure. Business Interruption insurance pays your employees, rent, and bills while your business is closed.
- How to Save: Check your indemnity period. This is the number of months your lost income will be covered. If you know you can reopen in 6 months, you do not need to pay for 24 months of coverage.
6. Liability Coverages Every Business Should Know
To avoid overpaying or leaving gaps in your protection, you need to understand the main types of liability insurance.
Commercial General Liability: This is the most common type of business liability insurance. It protects you if a customer or visitor gets hurt on your property or because of your operations, such as a customer slipping on a wet floor. It covers medical bills and legal costs. Every business needs this, and most landlords require it before signing a lease.
Professional Liability (Errors and Omissions): This protects you if a client sues you for a mistake in your professional work. For example, if a marketing consultant’s campaign does not perform as expected and the client claims a financial loss. This coverage is essential for consultants, accountants, IT professionals, architects, and engineers.
Product Liability: This protects you if a product you make or sell injures someone or causes damage. For example, if a homemade candle starts a fire in a customer’s home. This coverage is necessary for manufacturers, retailers, online stores, and food producers.
Directors and Officers Liability: This protects company leaders from lawsuits resulting from decisions made while managing the business. For example, if a shareholder sues the board for poor management. Any company with a board of directors, investors, or shareholders should consider this coverage.
7. Additional Coverages That Strengthen Your Protection
Depending on your business, you may need more than the basic policies. These coverages protect you from risks that many owners overlook.
CNESST (Workers Compensation): If you have employees in Quebec, you must register with CNESST. It covers workplace injuries. Keeping a clear, documented safety program can help reduce your CNESST premiums over time.
Equipment Breakdown Insurance: Regular property insurance covers fire and theft but does not cover mechanical or electrical failure. If a commercial oven breaks because of an electrical surge, your property policy will not pay. This coverage is vital for restaurants and manufacturers.
Umbrella Liability Insurance: This gives you extra protection on top of your existing liability policies. For example, if you have 2 million dollars in coverage but face a 3.5 million dollar lawsuit, the umbrella policy covers the remaining 1.5 million. It is useful for businesses with valuable assets or higher-risk operations.
Crime Insurance: This covers losses caused by employee theft, fraud, or forgery. For example, if a bookkeeper steals money over several years. Regular property insurance does not cover this type of loss.
Home-Based Business Insurance: Standard home insurance almost always excludes business activities. If a client visits your home office and gets injured, your home insurer may deny the claim. You need a home-based business endorsement or a separate commercial policy to stay protected.
Why Businesses Choose Qubit Insurance
Qubit Insurance exists to make insurance easier for business owners who do not have time to become experts. As a Montreal-based, AMF-regulated, independent brokerage, we work for you, not for an insurance company. We compare your file with insurers like Intact, Northbridge, Economical, Lloyd's, and Wawanesa to find the best price and coverage.
Because we are local, we understand the difference between insuring a building in Anjou versus the Plateau, and we know Quebec requirements such as Law 25 and CNESST. We are proactive, offering advice that helps you reduce risk and manage your insurance costs over time. And while we provide fast digital quotes, you still get support from a real, licensed broker who knows you and your business.
Conclusion
You cannot control inflation, Quebec weather, or rising reconstruction costs. But you can control how risky your business appears to insurance companies. With smart building upgrades, better vehicle management, stronger cyber protection, and support from an independent broker like Qubit Insurance, you can reduce your insurance costs.
Insurance does not have to be confusing or expensive. Get a free quote from Qubit Insurance and our team will review your current policy, show you where you may be overpaying, and help you find better coverage at a better price.
Stop overpaying for commercial insurance. Contact Qubit Insurance today and start saving.
Disclaimer: This guide is for educational purposes only. Insurance needs vary for every business based on industry, location, size, and specific circumstances. The information provided does not constitute legal or financial advice. Always consult with a licensed insurance broker for advice specific to your situation.
Frequently Asked Questions
1. How can I get cheaper commercial insurance in Montreal?
Work with an independent broker who can compare prices from several insurance companies and create real competition. You can also lower your costs by raising your deductible, making safety upgrades to your building, avoiding small claims to keep your record clean, and reviewing your coverage each year to remove anything you no longer need.
2. What types of commercial insurance are required by law in Quebec?
Commercial auto insurance is required if you use vehicles for business. CNESST is mandatory if you have employees. General liability insurance is not required by law, but most landlords and clients will ask for it in contracts. Some professional groups, such as engineers and accountants, also require their members to carry professional liability insurance.
3. Does my home insurance cover my home-based business?
No. Standard home insurance policies exclude business activities. If a client gets injured at your home or your business equipment is stolen, your home insurer will likely deny the claim. You need a home-based business endorsement or a separate commercial insurance policy.
4. What is the difference between a broker and an insurance agent?
A captive agent works for one insurance company and can only sell that company’s products. If that company raises its prices, the agent cannot offer you any alternatives. An independent broker works for you, not for an insurance company. They can get quotes from many different insurers, which creates competition and usually leads to better prices and more coverage options for your business.
5. How often should I review my commercial insurance policy?
Review your policy once a year at renewal. You should also contact your broker anytime you buy new equipment, renovate your building, hire new employees or drivers, change your operations, or expand to a new location. All of these changes can affect your coverage and your premium.
