Which insurance costs belong in my business expenses?
Business Insurance: What to Review at Tax Time. Understand the Canadian tax rules, records to gather and practical next steps before preparing your return.
Request a quote →Arsen Accounting Services · Prepared October 29, 2026
Self-employed expenses: 10 questions before filing · Browse the 100-article collection
The direct answer
Ordinary commercial coverage for business property and equipment can be deductible. Vehicle and home-workspace insurance are considered within those expense categories, using the appropriate business portion. Personal life insurance is generally not an ordinary business deduction; narrow exceptions need separate review. A bundled policy may therefore need to be separated before it is entered.
Match each policy to what it protects
An insurance payment may cover commercial liability, professional work, equipment, a vehicle or personal protection. Give the preparer the policy description, coverage period and business purpose. If a policy combines several types of coverage, request a breakdown. A total labelled “insurance” cannot show whether the whole amount belongs in the business expense calculation.
Account for mixed use and timing
A policy may relate partly to personal property or cover a period extending beyond the current year. Keep those facts visible rather than allocating the whole bank payment automatically. If a premium was refunded or financed, include the adjustment and payment schedule. The accounting treatment should follow the underlying coverage, not just the withdrawal appearing on a statement.
What to gather before the review
- Policy summaries and invoices
- Coverage dates, refunds and adjustments
- Details of personal or mixed-use coverage
Is every insurance policy deductible because I am self-employed?
No. The policy must be assessed according to what it covers and the applicable rules. Personal protection and business coverage should be identified separately before an expense is claimed.
Your next step
Bring the policy schedule as well as the payment total so the insured risks can be identified.
Related reading
Official sources
Sources checked for this collection on October 28–29, 2026. Annual forms may refer to a specific tax year. Use the rules and limits for the year being filed. General information; eligibility, elections and deadlines depend on the facts. No deduction or tax saving is guaranteed.
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