Running a business that never sleeps comes with a hidden price tag. According to Danish Yusuf (pictured), founder and CEO of Zensurance, small businesses operating late into the night or around the clock often pay as much as 50% more for insurance compared to counterparts with standard working hours.
The elevated premiums reflect higher exposure to risks such as theft, vandalism, and liability incidents – yet many owners still underestimate the coverage they need to protect their operations.
Yusuf said there’s limited precise data on percentage increases by Canadian insurers, but added that general indications point toward noticeably higher premiums for late-night operations (or limited market options available), though exact percentages are often proprietary.
In cannabis retail, premiums can run up to 75% higher than other retailers due to high-value inventory and increased disruption exposures, Yusuf said.
“It's reasonable to estimate surcharge ranges of 15 to 50% or more, depending on risk controls and claims history,” he added.
Yusuf noted that crime-related exposures are the biggest driver of claims for late-night and 24/7 retailers, particularly robberies and break-ins.
The extended hours mean stores are open during times when there are fewer witnesses around, raising both the likelihood and severity of such incidents. For businesses licensed to sell alcohol, liquor liability can add another layer of risk, he added.
Compared to daytime-only retailers, 24/7 operations face markedly higher vulnerabilities, he explained. Theft and vandalism are more common, while round-the-clock traffic also increases the chance of slip-and-fall incidents. With fewer staff on duty and less immediate housekeeping overnight, small hazards can escalate more easily into claims.
“Therefore, late-night retailers typically encounter greater claim frequency and severity than their standard-hours counterparts,” Yusuf told Insurance Business.
Among different types of late-hour businesses, Yusuf pointed to cannabis dispensaries as facing the steepest premium hikes. The combination of high-value inventory, cash-heavy transactions, and strict regulatory requirements – including elevated liability limits – makes them particularly vulnerable. Persistent break-in attempts have further pushed premiums higher, with surcharges sometimes reaching 75% above what standard retailers would pay.
Convenience stores also carry heavy cost burdens, especially those selling alcohol or fuel. These locations combine high crime exposure with slip-and-fall risks and environmental liabilities tied to fuel storage, resulting in significant, though slightly lower, surcharges compared to cannabis shops.
“Late-night eateries fall between the two in terms of risk: they face property, food-related liability, and slip hazards, but inventory is of lower value compared to cannabis. Thus, premium increases are moderate in comparison,” Yusuf said.
Despite the elevated exposures, Yusuf said many small business owners continue to underestimate the risks or fail to secure adequate coverage. This creates a gap in awareness that brokers must actively work to close. Structured advice is essential, he explained, with brokers playing a critical role in helping clients adopt stronger risk management practices.
Guidance on measures such as placing valuables behind counters, installing central-station alarms, and enforcing cash control protocols can make the difference between being properly protected and facing devastating out-of-pocket losses.
Insurers, for their part, do reward certain verifiable security investments with tangible premium reductions. Yusuf pointed to monitored alarm systems linked to central monitoring stations, video surveillance with recording and off-site monitoring, and strict cash-handling protocols as measures that consistently yield results. In high-crime areas, physical deterrents such as reinforced cashier enclosures or dedicated security staff can also drive premiums down.
“Less formal measures, like improved lighting alone, are often not enough for meaningful premium reductions,” he said.
Looking ahead, Yusuf said Canadian insurers are beginning to move toward more nuanced, data-driven underwriting for late-night businesses. While blanket surcharges tied to operating hours remain common – particularly for convenience and late-night retail – the market is showing early signs of refinement.
In cannabis, for example, stringent regulatory security requirements have led to improvements in claims performance, which in turn are starting to generate more competitive pricing. This suggests that tailored underwriting is possible when insurers see measurable reductions in risk, Yusuf said.
For other sectors, broad classifications still dominate, but Yusuf said neighbourhood-level crime statistics and documented use of security technology could increasingly shape rates in the years ahead. Verified measures such as advanced surveillance, central monitoring, and cash-handling controls may gradually carry more weight in pricing decisions.
“The market appears to be shifting, gradually moving away from one-size-fits-all surcharges toward underwriting based on specific risk mitigation factors,” he said.
