The short answer
Most one-person service businesses start with commercial general liability ($1 million to $2 million), then add what their work calls for: professional liability for advice, animal bailee cover for pets, bonding if you hold keys, and tools and auto cover if you drive to jobs with gear.
Published Canadian figures put basic liability for a low-risk solo business at roughly $100 to $500 a year, as of September 2026. Quotes vary with your trade, revenue, province and limits.
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Why a one-person business needs any of this
As a sole proprietor, you and the business are the same legal person. If a dog you're walking knocks over a cyclist, or a cleaning product ruins a client's hardwood, the claim comes out of your savings. Registering a business name doesn't change that; it's only a name (see how it works in Ontario, BC and Alberta). Insurance is the everyday protection, at a fraction of what incorporating costs.
It also wins work. Property managers, strata councils and some cities ask for a certificate of insurance before you start, and plenty of homeowners ask too.
The coverages, and who needs each
| Coverage | What it pays for | Who needs it most |
|---|---|---|
| Commercial general liability (CGL) | Injury to other people and damage to their property caused by your work, plus the legal costs of defending a claim. | Almost everyone who works in clients' homes or yards. |
| Professional liability (E&O) | Financial loss a client blames on your advice or a mistake in your service. | Tutors, consultants, bookkeepers; often bundled for pet care. |
| Care, custody and control (animal bailee) | Injury to, or loss of, an animal in your care. A standard CGL often excludes property in your care. | Dog walkers, pet sitters, boarders. |
| Bonding (fidelity or third-party bond) | Theft from a client's home. Check whether it covers you as the owner or only employees. | Cleaners, pet sitters and house sitters who hold keys. |
| Tools and equipment | Your gear, stolen or damaged at home, in the car or on a job. | Cleaners, detailers, landscapers, snow removal. |
| Commercial auto | Your vehicle while it's used for the business. | Anyone who drives to jobs, and especially anyone who carries clients' pets or equipment. |
Commercial general liability (CGL)
The foundation. CGL pays for bodily injury and property damage you cause to others while working, and the lawyers to defend you. Policies for small businesses usually come with limits of $1 million to $5 million per occurrence; $2 million is a common ask from property managers. Watch for the "care, custody and control" exclusion: damage to property you're looking after (a client's pet, a car you're detailing) is often excluded unless you add it back.
Professional liability, or errors and omissions (E&O)
The Insurance Bureau of Canada describes it as cover for claims "arising from acts of professional negligence" when you're paid for professional services or advice. A tutor accused of costing a student a scholarship, or a bookkeeper who misses a deadline, needs this more than CGL. For pet care, insurers often bundle it into the standard liability policy.
Bonding, for anyone holding client keys
Cleaners, pet sitters and house sitters walk into empty homes. A bond covers theft from the client, which liability insurance doesn't. Two things to ask before you buy:
- Does it cover the owner? Many fidelity bonds only cover employee dishonesty, which is no use to a business of one. Ask for a bond that covers you, sometimes sold as a third-party bond.
- Is lost-key cover included? Zensurance's dog walker guide (May 2026) lists loss-of-keys coverage up to $5,000 within its general liability policy. Re-keying a house after you lose a client's keys adds up quickly.
Canadian insurers don't publish bond prices consistently, so get a quote alongside your liability policy.
Tools and equipment
A detailer's pressure washer, a cleaner's vacuum or a snow removal crew's blower is usually covered by a home policy only in a limited way, and often not when it's in your car or on a job. A tools and equipment (or "contents") add-on covers it wherever it is. KBD Insurance's 2026 cost guide puts minimum contents coverage at around $75 a year for roughly $20,000 of contents.
Commercial auto, if you drive to jobs
The IBC's page on types of auto coverage says commercial auto coverage "is necessary for personally owned vehicles that are used for business purposes." How your insurer treats driving between clients varies, so tell them what you do: how many kilometres, whether you carry equipment or clients' pets, whether you plow. Business use the insurer doesn't know about can put a claim at risk. It's especially important for snow removal with a plow-equipped truck and for pet transport.
Where home insurance stops
If you run the business from home, don't assume your home policy has you covered. The IBC says "most homeowner's policy only offers a small coverage limit for books, tools and instruments necessary for a business, profession or occupation only while the items are in your home." And the personal liability part of a home policy generally doesn't respond to claims from your business activities, such as a client hurt at your home, a tutoring student who trips on your stairs, or a boarded dog that bites a neighbour.
The fix is usually cheap. KBD Insurance says a home-based business extension can cost as little as $150 a year, as of March 2026. Either way, tell your home insurer you run a business; an insurer that didn't know about the business may dispute a claim connected to it.
What it costs: published Canadian figures
| Coverage | Published price point | Source |
|---|---|---|
| General + professional liability, independent dog walker, $1M each | From about $100/yr | Zensurance, May 2026 |
| Basic general liability, small pet service business, $1M | From about $300/yr | Ratehub, 2022 |
| General liability, typical small business, $1M | About $500/yr | Zensurance |
| Liability-only policy | From $500/yr | KBD Insurance, March 2026 |
| Business contents (about $20,000) | From about $75/yr | KBD Insurance, March 2026 |
| Home-based business extension | From $150/yr | KBD Insurance, March 2026 |
Figures compiled September 2026 from the insurance brokers' and comparison sites' own published guides, linked above. They're starting points, not quotes: premiums depend on your trade, revenue, province, limits, deductible and claims history. Biller doesn't sell insurance and has no arrangement with any of these companies.
Two ways to keep the cost sensible: get quotes from at least two or three brokers or insurers who work with your trade, and ask what your biggest clients actually require before you pay for higher limits.
By trade: where to start
- Dog walkers and pet sitters: CGL with animal bailee (care, custody and control), vet-cost cover, and bonding or key cover. Check the breed exclusions. Build the premium into your rates: the pet sitting pricing guide and the dog walking pricing guide show what Canadians charge.
- House cleaners: CGL, a bond that covers you, and tools and equipment. See the house cleaning pricing guide.
- Snow removal, landscaping and detailing: CGL with enough limit for slip-and-fall claims, equipment cover, and a commercial auto conversation with your insurer. The snow removal pricing guide covers seasonal contracts.
- Tutors: professional liability first; CGL if students come to your home, plus a home-based business extension.
Insurance is a business expense
Business insurance premiums go on line 8690 of Form T2125. The business share of vehicle insurance belongs with your motor vehicle expenses, and home insurance goes in the business-use-of-home calculation. Insurance isn't subject to GST/HST, so there's no input tax credit to claim on it, whatever the GST/HST status of your business. To see what your profit costs in tax after expenses, try the self-employed tax calculator.
Common questions
How much is small business insurance in Canada?
For a one-person, low-risk service business, published Canadian figures put basic general liability at roughly $100 to $500 a year, as of September 2026. Zensurance says an independent dog walker can start around $100 a year for $1 million of general and professional liability, while KBD Insurance says a liability-only policy can cost as little as $500 a year. Your quote depends on your trade, revenue, location, limits and claims history.
Do I need liability insurance as a sole proprietor in Canada?
No law requires general liability insurance for most sole proprietors, but some clients, property managers and park or city permit programs do, sometimes with limits of $2 million to $5 million. Without it, a claim is paid from your personal savings, since a sole proprietor is personally liable for business debts.
Does home insurance cover my home-based business?
Usually only a little. The Insurance Bureau of Canada says most home policies only offer a small limit for business tools and equipment, and only while they're in your home. Personal liability on a home policy generally doesn't cover business activities. Tell your insurer about the business and ask about a home-based business extension or a separate policy.
What insurance does a pet sitter need in Canada?
General liability for injury or damage to other people and property, care, custody and control (animal bailee) coverage for the pets themselves, and bonding or key coverage if you hold clients' keys. Pet care policies in Canada often bundle liability and professional liability, with add-ons for animal bailee and veterinary costs.
What's the difference between being insured and being bonded?
Liability insurance pays when you accidentally injure someone or damage their property. A bond covers theft, such as money or valuables going missing from a client's home. Many bonds only cover dishonesty by employees, so a one-person business should ask whether the bond covers the owner too.
Do I need commercial auto insurance if I drive to clients?
Tell your auto insurer that you drive for your business, and ask whether your personal policy covers that use. The Insurance Bureau of Canada says commercial auto coverage is necessary for personally owned vehicles used for business purposes, and business use affects your premium. Driving without disclosing it can put a claim at risk.
Is business insurance tax deductible?
Yes. Business insurance premiums are a business expense, claimed on line 8690 of Form T2125. The business share of vehicle insurance goes with your motor vehicle expenses instead, and home insurance goes in the business-use-of-home calculation.