Business owners are among the most underserved insurance clients in Canada. Not because coverage doesn't exist. Not because the products are inadequate. But because the client herself typically doesn't understand what she has, doesn't trust the system that provides it, and won't reach for it when the moment arrives.
This is the central finding of Kate McCaffery's April 2026 Insurance Journal1 report on resilience planning for business owner clients. The picture that emerges is one of structural misalignment: between what advisors know, what clients believe, and what actually happens when risk materializes.
The Trust Problem
The foundation of the challenge is distrust. McCaffery reports that a recent TD Insurance survey of business owners found a significant number would rather put damages on their credit cards than make an insurance claim. A separate TD survey of 400 Canadian small business owners found that 94 per cent carry business insurance, yet only 52 per cent said they would actually use it if needed. Fifty per cent said they would turn to credit cards first.
This is not a coverage gap. It is a credibility gap.
Advisors on the ground confirm it. McCaffery writes that Amrit Mavi, CFP with ATA Financial Group, describes client hesitation plainly: clients are "just hesitant about insurance and they don't trust the insurance company." P&C specialist Marci Lall of FSB Group Ltd. adds that business owners, particularly newer ones, "are not really asking the questions" when shopping for coverage, while seasoned owners simply seek better rates. Both behaviors reflect the same underlying condition: engagement without understanding.
The practical consequence is well captured by Lall. Insurance gets lumped into a generalized category of distrust, where claims are assumed to cause premium spikes and coverage is treated as money wasted on something that will never be needed. McCaffery notes that this reticence extends across both life and health and P&C lines.
The Planning Imperative
Life agent and financial flight planner Mike Reilly of Gaining Altitude Financial frames the structural solution precisely. McCaffery quotes him arguing that a business should be treated as its own person: "it's just an entity that doesn't have a heartbeat. We have to do the same level of planning for them." That means identifying risks, finding exposures, modeling the impact, and building a response before anything goes wrong.
The most consistently overlooked planning gap, Reilly argues, is buy-sell protection. The conversation in McCaffery's article illustrates how often the issue surfaces only after prodding:
Business owner: "We've got a buy-sell agreement." Advisor: "That's great. How are you funding it?" Business owner: "Well, it's in the buy-sell agreement!"
Without funded buy-sell agreements backed by life, critical illness, or disability coverage, businesses scramble when a partner dies or becomes disabled. The agreement exists on paper. The liquidity does not.
McCaffery also highlights the savings dimension. Reilly cautions against advisors who move too quickly to insurance solutions before confirming a client's financial foundation is stable enough to support premium payments. "How can you survive a month if your income were reduced by 50 per cent because of external circumstances?" is the question he asks before any product conversation begins.
The Advisor's Role
TD Insurance's practice guidance, cited in McCaffery's article, identifies five behaviors that distinguish effective advisors in this space: proactively educating clients on coverage, limits, deductibles and exclusions; regularly reviewing policies against business growth and inflation; simplifying information; encouraging claims when appropriate; and tailoring coverage to industry-specific risks rather than defaulting to generic products.
These are not complex recommendations. Their consistent execution is what separates advisors who retain clients through claims from those who lose them.
Five Key Takeaways for Advisors and Investors
- Distrust is the primary barrier, not product quality. Nearly half of insured business owners would reach for a credit card before filing a claim. Education must address this before coverage gaps can be meaningfully closed.
- Buy-sell agreements without funding mechanisms are effectively inoperative. Every buy-sell conversation should immediately surface the liquidity question.
- Resilience planning starts with cashflow stress-testing, not product selection. A client running on thin margins needs savings before a premium schedule.
- Key person coverage is systematically undersold. For small businesses, the owner is the business. For mid-sized firms, the coverage universe should expand accordingly.
- Policies must be reviewed continuously against business growth, inflation, and new risk exposures. A policy set years ago is almost certainly underweight relative to current operations.
Footnote:
1 McCaffery, Kate. "Resilience Planning for Your Business Owner Clients." Insurance Journal, vol. 30, no. 2, Apr. 2026, pp. 34-36. Insurance Journal Publishing Group.
