Commercial insurance costs are rising across Canada as the COVID-19 pandemic persists – but there is more to the rate hikes than just the coronavirus, the Insurance Bureau of Canada (IBC) explained.
According to IBC Western vice president Celyeste Power, the commercial insurance sector’s problems began even before the pandemic.
"The commercial market was going through a bit of a correction and we have ended up with a bit of a supply and demand problem," Power told CBC News in an interview.
Despite the complications brought about by COVID-19, businesses still need insurance – possibly even more than before, Power noted. But there are now less insurers in the market that offer commercial coverage.
"That's creating a bit of chaos in the market for small businesses right across the province and across the country," the vice-president said, commenting on the state of Ontario’s commercial insurance.
To further complicate matters, low interest rates and severe weather events have also led to increased claims, Power stated. Adding everything together with an ongoing pandemic just made things even worse.
"It's creating even more challenges for businesses, insurers, small businesses, retailers, restaurants alike have sort of created, unfortunately, a bit of a perfect storm of events that is impacting our businesses.”
Last month, IBC had established the Business Insurance Action Team to aid businesses that are finding it difficult to purchase insurance during the pandemic.
"We also have a business helpline set up with experts from the insurance industry that don't work for one company or the other," Power explained. "So there's no bias set up to help customers right away and sort of navigating what is a bit more of a challenging market."
