Toronto-Dominion Bank’s TD-T insurance arm is extending its coverage to include insurance protection for small-business owners as demand for security continues to surge after the outbreak of COVID-19.

On Wednesday, TD Insurance announced the launch of TD Insurance for Business, a new product tailored specifically for small-business owners working across several industries including retail, contractors, wholesale, business and professional services and health care.

Tony Menon, senior vice-president of general insurance at TD Insurance, said the new insurance lineup is the first time the bank has offered insurance to small businesses, a customer segment that represents a significant portion of all businesses in Canada, and is linked to a “significant insurance demand” that has accelerated in the years since the onset of COVID-19.

“The pandemic has heightened the awareness and the need for insurance across the board,” Mr. Menon said in an interview with The Globe and Mail. “We know that there is an unmet demand to provide protection for small-business owners. We know that they have unmet needs with respect to having confidence in the level of coverage that they have or the types of coverage that they currently have.”

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The bank is entering small-business insurance after several years of difficult economic conditions for small-business owners, as COVID-19 lockdowns and restrictions had significant economic consequences on their revenue.

Canada’s commercial insurance market is competitive, with nearly 100 insurers offering some form of commercial insurance, according to the Insurance Bureau of Canada. But not all insurers offer coverage to small businesses – or in every sector.

For example, in 2021 Allianz Global Corporate and Specialty discontinued underwriting policies for new businesses on certain products – including insurance for restaurant and hospitality establishments. At the time, insurance brokers were being told that policies were being canceled because of concerns around the legal risks if a patron at an establishment contract COVID-19.

As well, the Canadian market is having a supply and demand issue after two major global insurers – Allianz Global Corporate and Specialty and Lloyd’s of London – exited certain markets in 2020.

TD could help fill that gap.

TD Insurance offers insurance policies in home and auto, health, life and travel. It sells directly to consumers, meaning it does not have any contracts with third party sales agents. Since the insurance unit opened its doors, the bank has only catered to personal lines of insurance for consumers.

Now, that is changing, said Mr. Menon, as the insurer has advanced its digital capabilities, including its back-end technology. The upgrades allow TD to redesign its existing services into commercial options more easily – such as commercial property, general liability and auto insurance for business vehicles.

Business owners in Ontario will be the first to access the new policies, with other provinces following over the next three to six months, Mr. Menon added. TD identifies small businesses as companies that typically have one to 10 locations with no more than five to six vehicles.

Commercial business policies are required for most establishments to be open, covering policy holders for fire, theft, liability and, in some cases, business interruption. But for many small-business owners, the cost of insurance remains one of the top business obstacles they expect to face over the next three months, according to a recent report by the Canadian Federation of Independent Business.

Insurance Bureau of Canada spokesperson Rob de Pruis said any new competitor to the market is “welcome” as it can have a “positive impact on insurance affordability” for consumers.

For, example, certain businesses, such as those in the hospitality industry, have been battling the soaring price of insurance costs during the pandemic. In some cases, insurance premiums for restaurants and music venues increased by 300 per cent.

While the hospitality industry isn’t a sector included in the initial launch for TD Insurance for Business, Mr. Menon said it is an industry – along with manufacturing and realty – that will be added to the TD offering at a future date.