Contractors Insurance Ontario

Insurance for Contractors in Ontario

As a contractor and builder, you know that when you need a hammer, you use a hammer. When you need a drill, you use a drill. You choose the right one when you need a specific tool to do a job properly. Using the proper tool is critical; you will want to do the same regarding contractors insurance.

Contractors insurance is a tool to ensure your business, you and your employees are appropriately protected from risks arising while operating your business. Proper protection is essential, so having the right contractors insurance is essential. Ontario contracting professionals who need the right insurance policy and experience a loss could be left with inadequate or no coverage. 

Insurance brokers are here to provide you with the information you need to know about contractors insurance. A broker with specialized training in commercial insurance can assist you through the process of getting contractors insurance that meets your needs. As brokers, we aim to provide you with the peace of mind that comes with knowing you have the right contractors insurance. Ontario contractors who have comprehensive contractors insurance can focus on what they do best—operating and growing their businesses.

Get the best contractors insurance coverage for your unique business needs! Whether you are an independent contractor specializing in one trade, a general contractor, or a large corporate firm, our brokers represent the most reputable insurers in Ontario. They will arrange comprehensive coverage for all aspects of your contractor's business.

We can provide contractors insurance coverage not only for the liability of your operations, but also for your truck or fleet of vehicles, your tools, equipment, rented equipment, your materials at job sites for installation, business interruption coverage, and a variety of extra expenses should a loss occur.

What Is Contractors Insurance?

Contractors insurance is a specialized insurance package tailored to a contractor's specific type of work. It usually consists of contractors commercial general liability insurance, along with commercial building, property, tools and equipment, and commercial automobile insurance. In addition to these contractors insurance coverages, additional coverage may be required depending on the type of business that the contractor does.

Insurance focuses on managing risk. That said, here are a few general questions for Ontario contractors and builders to think about:

• What risks are involved in your business? Personal injury? Property damage? Theft? Are there other risks?
• What kinds of risks do you need coverage for?
• Do you hire subcontractors or have employees who drive vehicles?
• Do you have one office, a home office, or several offices?

At Morison Insurance, our brokers know that it can be difficult and time-consuming for a contractor to assess their risks accurately when they need contractors insurance. Ontario brokers on our experienced team specialize in risk assessment and can make the process simpler and faster. We will ask questions about your company, such as what work is done, the size of your business, and how many employees you have. Your dedicated broker will get to know your business, so they can help you to determine the Ontario contractors insurance plan you should have.

What Is Contractors Commercial General Liability Insurance?

Contractor general liability insurance protects contractors against lawsuits or claims arising from property damage and bodily injury—to clients or a third party—that may occur on a job site and during projects under the general contractor's care, custody, and control. This type of coverage provides financial remuneration for claims, judgment, and/or settlement costs that may occur during the project and those that may arise after a project is completed.

Here are a few examples of the kinds of claims that may be covered by contractors commercial general liability (CGL):

• You install a shower in a home and sometime later the shower leaks, damaging the bathroom and several rooms below.
• Someone is visiting a job site to review the progress. This person steps on a nail or falls through the floor. They are injured.

Risks such as these are part of the daily reality of a contractor. We all know lawsuits can be costly. Legal action and settlements or judgments can sometimes bankrupt a company. The fact is that a single claim could put you out of business—if you don't have contractor liability insurance.

If you are an electrician, carpenter, painter, plumber, heating and air-conditioner expert, concrete, stone, tile, plaster or masonry expert, roofer, general contractor, or specialize in another trade, contractors commercial general liability coverage is an absolute necessity.

Contractors Commercial General Liability Insurance Includes:

• Protection against lawsuits or claims arising from property damage and bodily injury that may occur on a job.
• Protection for projects under the care, custody, and control of the general contractor.
• Protection for judgment or settlement costs that may occur during a project, and after a project is complete.

It's important to note that not all risks are covered by the commercial general liability portion of contractors insurance. Ontario contracting professionals should be aware of additional coverages they should have as contractors. Several other coverages are discussed later in this article. We advise you to contact a licensed Morison Insurance broker to discuss your specific and individual professional liability insurance needs or to begin a contractors insurance quote.

Likewise, it's worth noting that a contractor often must provide proof of contractor insurance before a specific job is granted. Contractors who are experienced in their field already know that a certificate of insurance is often required before a bid is accepted. Subcontractors may also be required to show that they have their own liability insurance before beginning work. In fact, before employing subcontractors, you should ensure they are adequately covered under their own policy.

Who Needs Contractors Insurance?

You will likely need Ontario contractors insurance if you perform maintenance or repair services for commercial or residential customers.

Here are some examples of businesses that should have contractors insurance:

• Heating and air conditioning contractors
• Plumbing and electrical contractors
• Residential handyman companies
• Excavating contractors
• Mechanical contractors
• Roofers
• Home Renovators
• Restoration companies
• Commercial and residential builders
• Environmental contractors
• Drywall installers
• Painters
• And more

How Does Contractors Insurance Work?

Contractors often think it is essential to have contractors insurance when doing a project or on a job. But what if something goes wrong after a job is finished? A contractor could be found liable long after a job is done. Contractors insurance can also protect after the contractor has completed one job and has moved on to other projects.

Contractors' commercial general liability may cover contractors if the work they've done and finished is incorrect and results in damages. For example, if you install electrical wiring in a home and make an error, and several years later, there's a fire resulting in the home burning down or other damage throughout the house, then you will still be protected under your contractors insurance policy.

Ontario residents and their businesses could be legally liable without the proper contractors insurance. This may result in millions of dollars of financial loss for your company and even cause the closure of your business.

Comparing the risks of not having contractors insurance to the annual premium cost of an contractors insurance policy, you can see it's well worth purchasing protection.

The cost depends on factors such as the type of work you do, the size of your business, your insurance claims history, and how many employees you have. Contact your broker at Morison Insurance to find out what coverage you need and how to start a contractors insurance quote.

Are Contractors Required To Have Insurance?

While contractors are not required by law to have contractors insurance, Ontario professionals who have had to deal with major financial setbacks will tell you contractors insurance is well worth having to protect you from risks faced regularly as a contractor.

Contractors face various daily risks, such as damage to their tools, theft, bodily injury, property damage, or being sued if an error is/was made in a project. Claims arising from these risks are often costly. With insurance, contractors could avoid high expenses (such as legal fees), which they will have to pay out-of-pocket. This can irreparably harm a contractor's business. Also, note that in many cases, contractors must show proof of insurance before they get a contract and/or begin a job.

Need help? Our team of expert brokers is available to help. We will assess the risks you face daily, explain coverages and insurance terms, and find a contractor's insurance policy that suits your unique needs.

Why Do Contractors Need Insurance?

Contractors insurance is recommended to provide protection, given the many risks contractors may encounter in their work and workplaces. No matter the size of the business, a contractor should have insurance.

While some contractors may think they do not need contracting business insurance, this is not true. Whether you are a drywall installer, electrician, scaffold contractor, painter, or any other type of contractor, you should have the appropriate contractors insurance. Contractors can be held liable for damages or injuries, and general liability insurance is essential. There are also other types of coverages that a contractor should have, such as builder's risk coverage. To learn more about contractors insurance and your specific needs, contact a broker who specializes in commercial insurance.

What Does Ontario Contractors Insurance Cover?

There are a variety of coverages available for contractors insurance. Expert brokers at Morison Insurance can help contractors get the coverage they need for their specific trade and business. Below are some typical contractor's insurance coverages.

• General Liability Insurance: This type of coverage protects you from bodily injury and property damage lawsuits, and covers damages that can occur due to your business operations.
• Commercial Property Insurance: This coverage protects your building(s) and office equipment in the event of an accident, natural disaster or theft/vandalism.
• Installation Floaters: Providing coverage for the insured's property and property of others being installed or waiting to be installed, installation floaters help to protect contractors and service providers from the exposures they face during installation.
• Equipment Insurance: This coverage protects equipment from vandalism or theft while at a job site.
• Commercial Vehicle Insurance: In Ontario, businesses must have liability and accident benefit coverage, and contractors might also need other optional automobile coverages such as collision and comprehensive coverage. It's important to note that if you're using a vehicle for both personal and professional reasons, you will need to insure it with a commercial vehicle policy. A personal auto policy will not provide adequate coverage.
• Builders Risk Insurance: This coverage protects owners and contractors from the impact of fires, floods, vandalism, theft, and other potential incidents that may occur while working on a project. This coverage offers flexible options to meet the specific insurance needs of residential or commercial projects. Brokers can tailor a policy specifically to your exposure.
• Performance Bond: Providing a financial guarantee for the completion of the commercial or residential project, this coverage offers protection to the person who has hired your services in the event you are unable to complete the project.
• Bid Bond: This type of coverage may be required to ensure a contractor has the resources, such as the financial and skills, to take on a project.
• Wrap-up Liability: Often used on large projects, this type of coverage protects the owner, contractors, and others involved for a specified time after work is completed. It includes bodily injury and property damage losses the insured becomes legally obligated to pay.
• Error and Omissions Insurance: Sometimes called E & O coverage or professional liability coverage, provides financial remuneration for damages resulting from faulty professional performance for which you are deemed liable.
• Environment Liability Coverage: If your work results in pollution to the environment and needs extensive cleanup, environmental liability coverage will respond to the emergency.
• Insurance for Home Builders and Builder's Risk Insurance: This coverage is designed to protect against property loss and provide protection for properties while they are being built. Builder's risk insurance is available to the building owner and the contractor who is constructing it. This coverage provides financial protection against the risk of property damage on a job site.

Important To Note:

1. Be aware that the entirety of these contractors insurance coverages excludes coverage for damage from incorrect design, planning, work, and materials.
2. It would be best if you had builders risk coverage for the total estimated value of the finished project. How is this determined? Often it is the selling price of the structure, minus the cost of the property/land. The builder can include a reasonable profit in the coverage amount.
3. If you seek to secure builders risk coverage, you will likely need a performance bond and/or bid bond and wrap-up liability coverages.

Ontario contractors insurance is a unique policy that combines multiple coverages to protect and insure contractors. General and contractor-specific policies are bundled together to create a business owner policy unique to the needs and type of work and contractors.

If you are working as a contractor, you need contractors insurance. Service and contractor professionals can protect themselves from injury, damages, and financial obligations with the proper coverage. A contractors insurance policy can be tailored to your needs to adequately protect yourself against legal liabilities.

Contractors Insurance For Home Builders

The home building and renovation sector is strong and growing in Ontario. Building homes can be complicated, and building projects can take a long time to complete. With the number of steps involved when building or renovating a home, it increases the risk that an accident may occur. This is when having the right home builders insurance is vital and most valued. Below are some of the contractors insurance considerations for home builders and renovators. We advise you to speak to a broker about the proper construction business insurance coverages for your home building or renovation company.

Essential Coverages For Home Builders

• General Liability Insurance: This protection covers bodily injury or property damage to a third party. Note that it does not cover the contractor or builder’s property, because this is covered by the builder's risk insurance, which is detailed below.
• Builder's Risk Insurance: Every builder or renovator, whether working on custom homes or community projects, should have this coverage. Builder’s risk insurance covers premises while they are being built or during major renovations. It provides protection from losses due to perils such as fire, theft, vandalism, weather happenings, and more. It includes the building and items that will be part of the structure, whether they are in transit to the building or being stored to become part of the building later. Builder's risk insurance does have limitations. For example, most builder’s risk insurance does not include tools or equipment. However, insurance can be provided for this. Additionally, it is ideal to have coverage in place before work begins on a project—however, some insurers can provide coverage after a project starts. In some cases, builders will be required to provide proof of contractors insurance before a project starts.

Additional Insurance Coverage For Builders To Consider:

• Wrap-up Insurance: This protection is a policy that is specific to a project and provides commercial general liability coverage for all contractors and subcontractors. It is project-focused. Wrap-up insurance ensures that everyone on a work site is insured for third-party injury or damage.
• Tools and Equipment Coverage: Home builders have lots of money invested in tools and equipment. It is vital to make sure these items are insured. Coverage can be arranged with an endorsement, which is an addition to an existing insurance policy. Speak to a commercial insurance broker to find out more about this.

Contractors Insurance For Electricians

As an electrical contractor or electrician, you need to carry electrician insurance. Electricians may be sued as a result of the services they offer. Sometimes things can go wrong on the job site, and electricians will want the protection of contractors insurance. Ontario electricians must know that the client may hold you and your business responsible for damages if an error occurs. Electrical contractors insurance protects you from lawsuits arising while work is being done or after completion. Make sure to have electrical contractors insurance no matter how large or small the job.

Essential Coverages For Electricians

• General Liability Insurance: A must for electrical contractors, this coverage provides protection in case of lawsuits that may be launched as a result of alleged poor work.
• Commercial Automobile Insurance: Electricians usually drive to job sites, thus commercial auto insurance is highly recommended. This coverage can protect company vehicles, such as vans, trucks, and others.

Additional Insurance Coverage For Electricians To Consider:

• Commercial Property Insurance: This policy is a good coverage option for electricians looking for comprehensive coverage. It can protect additional items associated with your business, such as personal property, commercial building tools, and equipment.
• Worker's Compensation Coverage: This coverage is a necessity for any electrical contractor. This type of insurance protects employees if they get sick or injured on the job, and is usually provided through the government.

Contractors Insurance For Plumbers

Although you may be the most experienced plumber, problems can still occur. Even a tiny mistake could lead to thousands and thousands of dollars in damages. For example, if newly installed pipes leak or there is a flood, a client may bring a lawsuit against your business. Plumbers insurance is essential to protect your contractor's business.

Must-Have Insurance For Plumbers

• General Liability Insurance: This protection is essential for plumbing contractors. It will provide coverage for lawsuits and other liabilities that may arise with on-site accidents and other mishaps.
• Commercial Automobile Insurance: Many plumbers drive to job sites, and commercial auto insurance is highly recommended—even if you are using a personal vehicle. This insurance can protect all company vehicles, including trucks and vans.

Other Insurance Options For Plumbers

• Commercial Property Insurance: This policy is a good option for plumbing contractors who are looking for comprehensive coverage. This kind of policy can protect additional items associated with a plumbing contractor's business activities such as personal property, tools, commercial buildings, equipment.
• Worker's Compensation Coverage: This coverage is necessary for plumbers to protect employees if they are injured or become ill on the job. It is usually supplied by the government.

Contractors Insurance For HVAC Contractors

Suppose you are contracted to repair or install heating and air conditioning units inside residential or commercial properties. In that case, you are advised to carry commercial general liability insurance. HVAC insurance protects you if damages occur due to your work. If there is property damage or somebody gets hurt because of your work, you may be sued by the party that suffered the accident or injury.

HVAC Contractors' Must-Have Coverages

• General Liability Insurance: HVAC contractor insurance financially protects HVAC experts. It provides liability protection if the technician is sued following or during work on residential or commercial projects.
• Commercial Automobile Insurance: Since HVAC contractors generally drive to work sites, they should have commercial auto insurance to cover all company vehicles such as trucks and vans—as well as personal vehicles that are being used for commercial purposes.

Optional Coverages For HVAC Contractors

• Commercial Property Insurance: This policy provides comprehensive coverage that protects items such as tools, equipment, commercial buildings, and personal property.
• Worker's Compensation Coverage: Usually supplied by the government, this coverage protects employees if they are injured or become sick while on the job.

Contractors Insurance For Painters

Should damages occur in residential or commercial properties due to a painting company's work, the painting contractor and the company may be responsible for any financial losses. Painters insurance and commercial general liability coverage protect these kinds of claims.

Must-Have Coverages For Painters And Painting Contractors

• General Liability Insurance: This protection covers painting contractors and painters from lawsuits that may arise for errors or damages that result in third-party bodily injury or property damage.
• Commercial Automobile Insurance: This policy is recommended because painting contractors typically drive to their worksites. This coverage can extend to company vehicles, such as trucks and vans, and should also be used for personal vehicles that double as work vehicles.

Other Options Coverages Painting Contractors May Need

• Environment Liability: If your work pollutes the environment and needs to be cleaned up, this contractors insurance coverage will help cover the cost of responding to the emergency, and any subsequent lawsuits you may face.

How Much Does It Cost for Contractors Insurance in Ontario?

The price of Ontario contractors insurance is determined by several factors, such as what kind of work you do, the size of your business, and your insurance claims history.

• What is your company's history with claims? Have you had previous insurance claims? If you have several claims in your past, this can push up your contractors insurance costs.
• What is the size of your business? How many employees do you have? How many people you need to insure will impact your contractors insurance costs.
• Where is your company located and where do you do your work? Are you operating in an area where there is a larger risk of crimes that may result in losses? These considerations will also impact your contractors insurance costs.

Our team of licensed brokers is trained to help with contractors insurance. Our brokers get to know your business, help you assess your risks and answer any questions you may have. Additionally, our team will contact several insurance companies to get you several contractors insurance quotes. Review the quotes and discuss the coverages with your broker before determining which policy best suits your needs.

Are Subcontractors Covered Under Contractors Insurance?

A general contractor is advised to ensure subcontractors have their own contractors insurance. The main contractor (general contractor) often hires subcontractors to carry out specific tasks on a project. Subcontractors are usually experts in various trades. Electricians, drywall specialists, heating and air contractors, plumbers, and others are often subcontractors.

As a general contractor, you must ensure that all subcontractors you work with have their own contractors insurance. You should obtain a Certificate of Insurance from each subcontract you use to verify that the subcontractor has commercial general liability insurance in place. It would help if you also asked to be included as an Additional Insured on their insurance policy for work you have subcontracted them to do.

If you are a subcontractor, having Ontario contractors insurance for your own protection is equally important. Use a broker's services to ensure you have the right protection.

Want to learn more about running a contractor's business in Ontario? FedDev Ontario has lots of info about running a contractor's business, including what you need to know about regulations, licenses, certificates, safety, the building code, warranties, health and safety, and more.

How Do I Get Contractors Insurance, Ontario?

At Morison Insurance, our expert brokers can help you get the contractors insurance coverage you need to protect appropriately while at work. Our brokers work for you, not an insurance company, and have training in managing the details of contractors insurance. Ontario contractors can count on our reliable team to shop around multiple insurers on their behalf. We'll contact the companies to provide you with several competitive quotes to get the best coverage at a competitive price.

While applying for contractors insurance, your broker will ask for some details on your business, discuss your insurance needs, and contact several companies to get you various quotes. Our team is focused on helping you and ensuring you get the best contractors insurance possible quickly and with no headaches. We know you have a business to run, and time is money. Let our award-winning commercial insurance brokers insure you with the right coverage. We invite you to fill out the online form below or call our qualified brokers at 1-800-463-8074 to start a contractors insurance quote today!

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.