Construction Insurance In Ontario
The Ontario construction industry is booming. Cities and towns are chock-a-block with builds and renos. Cranes dot the Toronto skyline. Communities across the province are being transformed.
Here are some statistics detailing the strength of the Ontario construction sector, which is a vital contributor to Ontario’s economy.
- Between 2002 and 2017, the Ontario construction sector grew almost 50%.
- In 2016, more than 503,000 people were employed in construction in Ontario.
- It is forecasted that one-fifth of Ontario construction workers will retire between 2018 and 2027. During this time, the industry is expected to attract 84,300 new workers. However, an additional 23,000 workers are expected to be needed.
So what does this have to do with construction insurance?
Construction business insurance is essential for those in the construction industry. Construction insurance in Ontario provides a construction company and all interested parties in the property with peace of mind during the course of construction. Construction projects can be a risky and expensive undertaking for businesses to participate in. There can be many unforeseen events, delays, mistakes, and errors. These problems can and do occur. Construction insurance is in place to provide insurance protection in these kinds of circumstances.
What Is Construction Insurance?
Construction insurance is a product tailored to best protect a construction company based on their specific operations, and those operations of third parties on construction sites. Construction insurance protects the property owner, developer, and contractors (including sub-contractors) by providing financial compensation for insured/covered losses during the construction of a building or buildings.
How Does Construction Insurance Work?
Construction insurance provides coverage from a project’s start to finish. This means construction insurance coverage from the bidding stage (to secure a contract) to completion when a building is occupied.
A construction business insurance broker is a trained and trusted advisor who will help contractors and builders through the process of getting construction insurance. A broker will gather information about your business, and, generally speaking, an application or applications are required, as the complexity of each construction project is often very different.
What Are the Main Considerations for Construction Insurance?
Among the primary considerations for construction insurance are:
- Size and location of the construction business (annual gross revenue/employee count)
- Operations/services that are offered/performed
- Value and limit of tools and equipment
- Who is the construction being done for? For example, it is residential? Commercial? Institutional? For government?
- Are the projects single projects or multiple builds?
- If they are multiple builds during the policy period, approximately how many?
These are among some of the factors that will inform a construction insurance broker to determine the types of coverages needed, limits of insurance, and the premium.
Things To Think About When Looking For Construction Insurance
There are numerous things to think about when looking for construction business insurance and determining what coverages to purchase like cyber protection, commercial auto/fleet coverage, bodily injury coverage, and tenants legal liability. Among the coverages to think about when looking for construction insurance:
- Bodily injury coverage
- Property damage coverage
- Third-party liability coverage
- Wrap-up coverage
- Tools and equipment on-site/off-site coverage
- Pollution coverage
- Employer’s liability coverage
- Non-owned auto coverage
- Commercial auto/fleet coverage
- Cyber protection coverage
- Builder’s risk coverage
- Delay in completion coverage
- Tenant’s legal liability coverage
- Installation floater coverage
- Products and completed operations coverage
- Business interruption coverage
- Machinery breakdown coverage
- Legal expenses coverage
Why Is Construction Insurance Important?
Construction insurance can protect interested parties’ assets, transfer risk contractually, account for labour changes, and help with financial compensation for covered losses, which may otherwise put a company out of business. Commercial general liability provides funds to pay for judgments/settlements associated with third-party legal matters.
Companies can help to avoid potential bankruptcy that may occur due to damages or losses and potential lawsuits by ensuring proper construction insurance coverage is in place.
Construction sites are complex. They are busy with lots of people, tools, equipment, and technology on-site. The sites can be dangerous, and unfortunate events can and will occur. It is best to have the proper construction insurance in place so that in the event of a loss, you are properly protected.
How Can Construction Insurance Help Your Business?
Construction insurance can help your business by assisting the company in securing contracts which, without confirmation of construction insurance in place with limits to meet contractual obligations, the business may not obtain. Construction insurance can also help solidify a company’s strong reputation in the construction industry for being an insured and/or bonded operation.
Who Needs Construction Insurance?
Anyone generating revenue by offering construction services/operations needs construction insurance. Some examples of these kinds of services/operations includes:
- Utilities contractors (plumbers, electricians)
- Mechanical contractors
- Commercial builders
- Residential builders
- Government construction builders
- Bridge construction companies
- Road construction contractors
- Snow removal contractors
- Excavation contractors
What Does Construction Insurance Cover?
Construction Insurance can cover many factors including professional liability, builder's risk, tools and equipment, and delay in completion. Among the coverages a construction business insurance policy may include are:
- General (construction) liability insurance
- Bid bonds
- Performance bonds
- Payment bonds
- Commercial auto/fleet coverage
- Builder’s risks - both blanket and project-specific - coverage
- Tools coverage
- Equipment coverage
- Wrap-up liability coverage
- Professional liability coverage
- Management liability coverage
- Delay in completion coverage
- Explosion, collapse and underground liability coverage (Also known as XCU)
- Installation coverage
- Pollution coverage
- Business income coverage
- Crime coverage
- Umbrella and excess liability coverage
- Inland marine coverage
When you are looking for construction insurance, a commercial insurance broker who specializes in construction insurance will need to know details about your business. A broker will discuss construction insurance coverages, endorsements, limits, exclusions, and costs. You will need construction insurance specially crafted to meet your business' needs. The policy would include commercial general liability layered with other additional coverages – such as those listed above – to meet the specific requirements of business and the site or build involved.
How Much Does Construction Insurance Cost?
The cost of construction insurance varies significantly because the premium is determined by numerous factors related to the construction business and the construction work that is being done. Some of the factors involved in determining the cost of construction insurance are:
- Location of the business
- Size of the business
- Past insurance claims record
- Annual gross revenues of the business
- Size of project/value of building upon completion
- Duration of construction project
- Types of operations on-site such as demolition, tunneling, drilling, snow removal, mining
- Is it a residential, commercial, or industrial project? Is it private? Is it for government?
- Is it near an airport or very rural?
- Does the work on-site include flammables, use of explosives for demolition, underpinning buildings?
- Does the construction location have a high crime rate?
- Is there structural work being done? Raising or moving structures?
- What is the experience of the crew/contractors?
- What is the type/age/value/limit of equipment and tools being insured?
- Is there security on site? Is the site gated? Is there a night security person? Is the site visible from a main road?
Where to Get Construction Insurance?
Construction projects are complex, and construction insurance can be complicated. Construction insurance is not a one-size-fits-all product. A generic insurance policy is not suitable for anyone looking for construction insurance.
Construction insurance needs to be tailored to fit the insured’s specific needs. Builders should be sure to speak with an insurance broker who specializes in commercial insurance and construction insurance in particular. A construction insurance broker will advise and guide you through the construction insurance process.
Here is the vital thing: Work with a construction insurance broker who pays attention to details, and work with you to make the process of getting construction insurance as simple as possible. The goal is to get the proper construction insurance for your construction business.
Construction Insurance For Residential Home Builders, Renovators, and Cabinetry Professionals:
Here is a list of some construction insurance coverages and things to consider when looking for construction business insurance:
- Commercial general liability insurance is essential.
- Consider whether you need blanket insurance coverage or project-specific coverage.
- Are you a home builder with a small crew that builds one house at a time?
- Are you a home builder who works on larger projects with multiple builds on the go per term?
- What are the insurance requirements of the town, city, or rural area where the site is located?
- Your customers want to be protected. They want to know that their home builder has insurance.
- Be sure to have tool/equipment/installation coverage – floaters where exposure is appropriate
- Be sure to have employer’s liability.
- Be sure to have licensed contractors only on the site.
- Products and completed operation coverage
- Employer’s liability coverage
- Non-owned auto coverage
- Structural work coverage
- Underpinning coverage
- It is advised that sub-contractors and/or contractors provide proof of liability insurance and that trades, such as electricians, are licensed.
- Be sure to have proper stock/material and installation limits in place in your construction insurance policy.
- Be sure to have completed operations insurance, which provides coverage after a project is finished.
Construction Insurance For Excavation Companies
Here are some coverage considerations when looking for construction insurance for excavation companies:
- Most often, an excavation contractor has high-valued equipment and tools. Make sure these are correctly insured.
- The insurance company will want to know where the excavation company is working. Are they doing work at a mining site, on water, on an island? Are they moving equipment on a barge? Are they doing structural work?
- Is there a high potential for a third-party liability claim due to property damage or personal injury?
- Years of work experience can be a factor when getting construction business insurance. Insurance companies are looking for best-in-class operations. They want to know that there are strict protocols in place.
- If demolition work is being done, what kind of demolition work is required? Is all mobile equipment plated? Are GPS tracking devices installed on scheduled contractor's equipment? *How much demolition work is done – amount per year? What is the split of operations - for example, underpinning, excavation?
- Are the excavation contractor’s tools and equipment at high risk of theft?
- Most commercial general liability policies exclude explosion, collapse, and underpinning liability coverage – also called XCU. This must be added to any excavation contractor’s insurance policy with suitable limits.
Construction Insurance for Construction Site Companies
Here are some coverage considerations when looking for construction insurance for construction site companies:
- Construction site companies will need to cover their own employees
- Office equipment coverage
- Commercial general liability insurance
- Subcontractors insurance - subcontractors should have their own contractors insurance
- Wrap-up insurance
- Coverage for accidents related to the environment –pollution/clean up
- Cyber coverage
- Legal expense coverage
- Commercial auto coverage
Some additional considerations to discuss with a construction insurance broker include:
- Do you have security on-site?
- Do you have health and safety protocols in place?
- What is the value of tools and equipment, and are they insured?
- How many tradespeople are on the site and are they insured?
- Are all of the tradespeople on-site licensed?
Note that for in most cases, proof of construction insurance will be required if a project involves bidding or entering into a contract with a municipality or government body.
How Do I Get A Quote for Construction Insurance?
You can get a quote for construction insurance by contacting a broker who specializes in construction business insurance.
When you are looking for a quote for construction insurance, there are several things to keep in mind.
- Ontario contractors are required to have general liability insurance, which provides protection in case of bodily injury to a third party, or damage to property while on the worksite.
- Ontario contractors employing one or more employees are required to have workers compensation insurance to protect their employees.
- When looking for a quote, contact a commercial insurance broker who specializes in construction insurance in Ontario.
- Select a commercial insurance broker who knows construction insurance will take the time to work with you and get to know your business.
- Share information about your business and your construction work with the construction insurance broker. This process may take some time, but the time is well spent to ensure you get the proper construction insurance.
- Construction insurance is complicated with lots of jargon. There are many construction insurance options, limits, exclusions, and endorsements to be aware of. An insurance broker with experience in construction insurance will explain these terms to you.
- Get several construction insurance quotes from several insurance companies. Work with a commercial insurance broker who can get you several competitive quotes for your construction insurance. Not all insurance companies offer the same coverages, and prices do differ. It pays to have a broker who can shop around for you. This gives you choices, and you get to choose what insurance policy and the premium is right for you.
- Receiving year-round excellent service from your insurance broker is essential. Work with a broker who will be available to you throughout the construction insurance policy term. There are few things more aggravating than trying to reach your broker - with a question, to report a claim or change your coverages - and you can’t contact them. Be sure you select a broker who is available to serve you and is pleased to help you whenever needed.
- Check out the insurance broker’s online reviews. This is often a good indicator whether a company has a solid reputation, great insurance products and excellent service.
Why You Should Choose Morison Insurance For Your Construction Insurance?
Morison Insurance is the broker to choose when looking for construction insurance because our brokers are trained, licensed and experienced construction insurance brokers.
Here are some additional reasons to choose Morison Insurance:
- Morison Insurance is a provincial and national award-winning insurance brokerage focused on providing the best insurance and service.
- We are Educated and Knowledgeable. Every Morison Insurance broker is trained and licensed. Our commercial insurance brokers know construction insurance. They also receive on-going training on new insurance products, changes in the industry, and services to serve customers better.
- We Provide Personal Service. We are customer-focused. Every Morison Insurance customer has a broker dedicated broker looking after their insurance. We are not a call centre. At Morison Insurance, we are committed to knowing you personally; you are not a policy number to us.
- We Shop For You. We shop insurance companies across Ontario to secure our customers' competitive insurance quotes. We shop for you. There is no cost to you for our services. We look for the best construction business insurance to meet your needs, and we help to ensure you are properly insured.
- You Are The Boss. It is our pleasure to educate and guide you through the process of getting construction business insurance. We will provide you with information and options on coverages and prices. In the end, you choose the construction insurance you want. Here is the bottom line: You have choices, and you are in the driver’s seat.
- We Work For You, Only You. If you have a claim, we are here to help guide you through the claims process. We will work with the insurance company and advocate for you. Our goals: Fast and fair resolution of claims for you. This means you can focus on running your business.
- Our Customers Are Happy With Their Insurance. Read our Morison Insurance online customer reviews and testimonials, and you will see that our customers are happy with our service and insurance products. We are proud to go beyond every day to be the best insurance broker in Ontario.
- We Are A Family and We Invite You to Join Us. At a time when big insurance companies are focused on eliminating the human experience out of insurance, we are keeping insurance personal. Insurance is about helping people. It is our pleasure to look after your insurance needs. Morison Insurance is a family-owned and operated company and one of the largest wholly independent single owner brokerages in Ontario. We lead with a family-first mentality, and every customer is treated like family. When you reach out to us, you are part of our family, and we treat you like as so. Our brokers respond quickly with the information you need. We care. Our goal is to provide personal insurance excellence or every customer.
- We Are A Full-Service Insurance Broker. Morison Insurance provides a full suite of insurance products – home, business, auto, recreational, life, and more. This means we can look after all of your insurance needs. We are your all-in-one insurance broker.
- We Love To Save You Money. We are committed to saving you money on your insurance whenever possible. We have many money-saving discounts available, and we will help you to get all the discounts you qualify for. Here is a tip: You can save money if you bundle your insurance with one insurance company. Bundling your home, auto, and business insurance can help you to save. Speak to our brokers about how you can save by bundling and getting all the discounts you deserve.
- We Are Nearby and Always At Your Service. Morison Insurance has nine southern Ontario offices to serve you, and we are among the most digitally capable insurance brokers in the industry. This means you can visit our offices, reach out by calling, emailing, texting, or us visiting us online. Reach out for expert insurance advice, powerful insurance protection, and personal and professional service.
We can be reached at 1-800-463-8074 or fill out the contact form on this page and one of our commercial insurance professionals will reach out to you. Our Morison Insurance brokers will provide you with a free no-obligation quote to help ensure your company is properly protected. Let's get started!
We began this article with some statistics about the Ontario construction industry’s growing need for workers. The Ontario Colleges website has a wealth of information about construction, renovation and building training. Whether you are interested in hands-on work or the business side of the construction industry, you will find lots of informative stuff here. There are details about salaries in the construction business, and what to expect when working in the industry. There is also lots of information on programs at Ontario colleges, how to apply and submit an application, tuition costs, financial assistance opportunities and much more. This is a terrific website to anyone looking to obtain training in the field of construction.
This content is written by our Morison Insurance team. It is provided for general information only. Insurance needs differ from person to person, and this article is therefore not a substitute for professional advice about your individual insurance needs which can be obtained by speaking to one of our brokers.