Several Canadian small business owners are hitting out at their commercial auto insurance providers, which they say are making onerous demands and charging exorbitant premiums that could put them out of business.
In an interview with CBC News, Frank Hunt, who operates a moving company in Barrie, Ontario, said his insurer suddenly demanded back in May that his drivers upgrade to a D licence, which was beyond what Ontario’s Ministry of Transportation requires. Legally, he and his drivers can drive the company’s five-ton moving trucks with a basic G licence.
Hunt told CBC News that his insurance provider’s demand had resulted in about a 75% loss in revenue for his company. “They’re literally shutting down the business,” he said.
Meanwhile, Kristine Hubbard, who works as an operations manager for a Toronto-based taxi company, said soaring insurance rates have pushed about 500 of the company’s drivers out of business.
She told CBC News that premiums have jumped to as much as $22,000 annually, more than triple those of last year, a price many of the drivers were unable to afford.
The Insurance Bureau of Canada (IBC) said the COVID-19 pandemic was to blame for the tighter policy requirements and higher insurance rates.
In a statement to CBC News, the IBC said the pandemic has made insuring clients more difficult and costly.
“COVID-19 is altering the social and economic landscape of our country and our world. Like many businesses, Canada’s insurers have been confronted with increased costs as they continue to support and protect Canadians through this difficult period,” wrote bureau spokesperson Vanessa Barrasa.
“A survey of bureau members projects that between March 01 and June 30, insurers offered just over $1 billion in personal and commercial insurance premium relief. Over the same period, Canada’s private insurers are projected to have provided nearly $200 million in deferred premiums to personal and commercial customers,” she added.
The Canadian Federation of Independent Business (CFIB) said it expects around 160,000 small and medium-sized enterprises to close due to the COVID-19 pandemic.
“Small businesses are hanging on by a thread, and it takes very little right now to push them over the edge towards permanent business closure,” CFIB president Dan Kelly told CBC News. “And these big insurance bills, or in some cases, the lack of insurance availability may be just enough to make that happen.”
