Small Business Confidence Hits Three-Year Low as 61% of Canadian Firms Lack Insurance

Canadian small business owners are under increasing financial pressure as rising costs, shrinking cash reserves and economic uncertainty continue to weigh on operations. Yet while many grapple with forces beyond their control, new research from Zensurance, Canada’s leading small business insurance provider, finds many are leaving themselves exposed to unexpected business risks, with 61 per cent of small businesses reporting that they operate without insurance coverage.

The findings come from the 5th Annual Zensurance Small Business Confidence Index, a national survey of 1,000 owners, entrepreneurs and self-employed professionals. Business confidence has now fallen for three consecutive years - from 70 per cent in 2024, to 58 per cent in 2025 and 49 per cent in 2026. Nearly half (47 per cent) have considered closing permanently at some point this year, and four-in-five are operating with three months of cash reserves or less.

The economic pressures shaping this outlook are widespread. Three-in-five respondents (59 per cent) say the economy has negatively impacted their business since the start of 2026. Seventy-one per cent report that total operating expenses have risen compared to last year, 58 per cent say that rising gas and fuel costs have hurt their bottom line, and 43 per cent report that revenues are lower than in the first half of 2025. Despite all of this, nearly half still describe themselves as confident about the months ahead.

"Business owners cannot control inflation, tariffs or shifts in the economy, but they can prepare for unexpected events that could threaten everything they’ve built. Business insurance is one of the ways owners can help protect themselves against those setbacks," said Danish Yusuf, CEO and Founder of Zensurance. "Our research suggests many businesses are focused on surviving today’s financial pressures while overlooking risks that could create even greater challenges tomorrow."

While much of today’s uncertainty is beyond any business owner’s control, preparedness isn’t. Yet the survey reveals a significant gap in one of the few areas where businesses can take proactive steps to protect themselves. When asked to identify their most significant business risk, owners pointed to customer nonpayment for completed work (29 per cent), followed by cyberattacks or data breaches (14 per cent) and theft or vandalism (9 per cent). The findings point to a clear gap: Most businesses recognize the risks they face but continue to operate without coverage.

The insurance gap has widened significantly, with the share of businesses operating without coverage nearly doubling since 2024, rising from 33 per cent to 61 per cent - a jump of 28 percentage points in two years.

More telling than the number itself is the reasoning, with owners largely unconvinced that they need protection. Twenty-nine per cent say they don’t think they need insurance, 38 per cent say they don’t face the kinds of risks it covers and 22 per cent say their business has no risks at all.

"Small business owners are often focused on the challenges they can see every day – costs, revenue and the economy – but the risks they cannot predict can have an equally significant impact," said Yusuf. "Understanding where they may be exposed can help owners make informed decisions about protecting the businesses they’ve worked so hard to build."