If you are starting a small business in Ontario, buy commercial general liability first. It protects you when a customer is injured or their property is damaged, and landlords and clients ask for it most often. Then add property, professional liability, business interruption, commercial auto and cyber as your business needs them. Your home insurance will not do this job.
Key takeaways
- Commercial general liability is the usual first policy. Contracts and leases often require it before you start.
- A home or personal auto policy generally does not cover business claims, so tell your broker about the business.
- Add the other covers in order of what you could not afford to lose: your stock and tools, your income, your reputation, your vehicle, your data.
- WSIB is a separate system for workplace injuries. It does not replace business insurance.
- Ask for a certificate of insurance early. Landlords and clients may need it before you sign.
Why your home policy does not cover the business
Many new owners start at the kitchen table or in the garage and assume their home insurance comes along. Usually it does not, or only a little.
The Insurance Bureau of Canada (IBC) explains the common gaps for a home-based business:
- A home policy typically gives only a small limit for business equipment, and often only while that equipment is at home.
- Equipment you carry to a job, or leave in a vehicle, may not be covered under a home or personal auto policy.
- The personal liability cover on a home policy generally does not respond to business claims, such as a client hurt at your door or a complaint about a product you sold.
- Professional liability is not covered under a home policy.
The same idea applies to your car. A personal auto policy is priced for personal use. If you use the vehicle to carry tools, make deliveries or visit clients, tell your broker. Our guide on driving distance and vehicle use explains how use changes a policy, and the article on rideshare and delivery driver insurance covers the gig-driving case.
The simplest rule: if you earn money from it, say so. Staying quiet about a business can leave you with a refused claim at the worst moment. Our home insurance page explains what a standard home policy is built to do.
The order to buy
There is no single correct list, because every business is different. IBC says plainly that every business needs its own set of coverages. But a sensible order for sole proprietors, contractors, home-based owners and shop owners looks like this.
| Order | Coverage | Who needs it early | The question it answers |
|---|---|---|---|
| 1 | Commercial general liability | Almost everyone | What if someone is hurt or their property is damaged because of my business? |
| 2 | Commercial property | Shops, workshops, anyone with stock or equipment | What if my tools, stock or fit-out are stolen or burned? |
| 3 | Professional liability (errors and omissions) | Consultants, designers, trades giving advice or plans | What if a client says my advice or work cost them money? |
| 4 | Business interruption | Shops and anyone who depends on one location | How do I pay bills if a covered loss shuts me down? |
| 5 | Commercial auto | Anyone using vehicles for the business | What if a work vehicle is in a crash? |
| 6 | Cyber | Anyone who takes card payments or holds customer data | What if my data is stolen or my systems are locked? |
Your own order may shift. A Toronto shop full of inventory may put property next to liability. A freelance designer with no stock may put professional liability second. Use the table as a starting point, not a rule.
1. Commercial general liability
Commercial general liability (CGL) covers amounts you are legally obliged to pay for bodily injury or property damage to other people, and it can pay the legal costs of defending you. Think of a customer who slips in your shop, or a contractor who accidentally floods a client's kitchen.
It is not always required by law, but contracts, leases and clients frequently require it. That is why it comes first.
2. Commercial property
Commercial property covers the physical things your business owns: computers, stock, inventory, equipment and signs. It is the cover that responds if a fire, theft or similar covered event damages them. Ask whether the policy is "named perils" (covers only listed causes) or "all risk" (covers any cause unless excluded), and what the deductible is.
If you rent your space, ask who insures the improvements you make, such as shelving, counters or flooring.
3. Professional liability (errors and omissions)
If you are paid for advice or specialized services, professional liability covers claims that your work was negligent and caused a financial loss. IBC says it can respond to damages and defence costs for acts of professional negligence. General liability does not usually cover this, and a home policy does not either. Some regulated professions must carry it, so check the rules for your own field.
4. Business interruption
Business interruption is normally an add-on to commercial property insurance. It can replace lost income, or pay for a move to temporary premises, when a covered event forces you to stop. IBC notes that most policies require physical damage to the insured premises, so a shutdown from a data loss or a utility outage may not qualify. It is worth asking your broker exactly what triggers the cover and how long it pays.
5. Commercial auto
Auto insurance is mandatory across Canada. If your business owns, leases or regularly uses vehicles, you may need a commercial auto policy rather than a personal one. IBC also warns that business owners are generally responsible for their employees' negligent driving. If you only use your own car occasionally for work, ask your broker how to declare that use.
6. Cyber
If you accept card or online payments, keep customer records or rely on email and cloud tools, you have data risk. IBC says cyber insurance can respond to events such as data breaches, cyber extortion and technology disruption, and can help pay for investigation and data recovery. It can be a standalone policy or an add-on. Our dedicated guide to cyber insurance for small businesses in Ontario goes deeper.
WSIB is separate
The Workplace Safety and Insurance Board (WSIB) runs Ontario's workplace injury insurance. It is a different system from the policies above, and it has its own rules.
In general terms, as WSIB describes it:
- The Government of Ontario decides which industries and which types of workers must have WSIB coverage. It is not mandatory for every business.
- Once a business is registered, premiums cover its employees, but not its owners.
- Owners, including sole proprietors, partners and independent operators, can usually apply for coverage for themselves, as long as they cover any employees they have.
- Construction is treated differently: coverage for employees and owners is generally mandatory, with some exceptions.
WSIB does not cover a customer injured in your shop, damage to a client's property, or a professional error. That is why it does not replace CGL or any other cover in this article. Because the rules depend on your industry, confirm your status on the WSIB website or by phone before you hire anyone or take on contract work. If you hire subcontractors, ask your broker or WSIB how to check their coverage in your trade.
Certificates of insurance, contracts and landlords
Sooner or later someone will say, "Send me your certificate of insurance." A certificate is a short document from your insurer or broker that lists your policies, limits and dates. It proves you have cover. It is not the policy itself.
Who asks for one:
- Landlords, before you sign or move into a commercial space.
- Clients and general contractors, before you start work on their site.
- Event venues and markets, before you set up a booth.
- Franchisors and licensing bodies, in some cases.
Read the insurance clause in any contract before you sign. Look for the minimum limits they want, whether they want to be named as an "additional insured", and how long you must keep the policy. These terms vary by contract, so ask your broker to read the clause with you. A request you cannot meet is better discovered before you sign than on the first day of the job.
Allow a few days for a certificate. Do not wait until the morning you are meant to start.
What to ask your broker before you act
A broker can compare insurers and match cover to your trade. Brokers in Ontario are licensed by RIBO. IBC also says to review your policies with your representative regularly, since needs change as you grow. Our business insurance page can start the conversation.
Questions to ask:
- Which covers does my trade or my contract require, and which are only sensible?
- What limit of liability do my clients or landlord ask for, and is that enough for me?
- Does the policy cover work I do at a client's site, and work I do from home?
- Are my tools and equipment covered away from my premises, and in my vehicle?
- Is the property cover named perils or all risk, and what is the deductible?
- What triggers business interruption, and how long does it pay?
- Do I need professional liability and cyber, and can they be bundled?
- Can you issue a certificate of insurance, and add a landlord or client as additional insured?
- What happens to my cover if I hire help or start using a vehicle for work?
Before you act, work through this short checklist:
- Write down what you own, what you sell, where you work and who could be hurt or lose money because of you.
- Read every contract and lease for insurance requirements.
- Check whether WSIB applies to you.
- Tell your current home and auto insurers about the business use.
- Get quotes for liability first, then the next cover on your list.
A note on this article
This article is general information, not advice. Insurance rules, insurer practices and WSIB requirements change, and they depend on your trade and your contracts, so confirm the details with a broker. Reviewed October 2026.
