Contractors Insurance Ontario

Contractors Insurance 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. When you need a specific tool to do a job properly, you choose the right one. Using the proper tool is critical, and you will want to do the same when it comes to contractors insurance.

Contractors Insurance is a tool to make sure your business, you and your employees are appropriately protected from risks that arise while operating your business. Proper protection is essential. The right contractors insurance policy is an absolute must. If you don't have the right contractors insurance policy and you experience a loss, you could be left with inadequate coverage or no coverage. It's like having pliers when you really need a drill.

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. Our goal as brokers is to provide you with the contractors insurance policy that provides peace of mind. Having the right contractors insurance means you have one less thing to think about. It means you can focus on what you do best—operating and growing your business.

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 and will arrange comprehensive coverage for all aspects of your contractor's business.

We can provide 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 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. That's why our team specializes 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 contractor's 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 care, custody, and control of the general contractor. This type of coverage provides financial remuneration for claims, judgment, and/or settlement costs that may occur during the project, as well as 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 very expensive. In some cases, legal action and settlements or judgments can bankrupt a company. The reality is that a single claim could put you out of business—if you don't have contractors 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 commercial general liability does not cover all risks. There are additional coverages you should have as a contractor. 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 insurance needs.

Likewise, it's worth noting that before a specific job is granted, a contractor often needs to provide proof of insurance. This 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?

If you perform maintenance or repair services for commercial or residential customers, you will likely need contractors insurance.

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
• 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 they are doing a project or on a job. This is true.

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 provide protection 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.

If you do not have the proper insurance, you and your business could be found legally liable. This may result in millions of dollars of financial loss for your company, and even cause the closure of your business.

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

The cost of contractors insurance 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 to find out what coverage you need and the cost of Ontario contractors insurance.

Are Contractors Required to Have Insurance?

Contractors are not required by law to have contractors insurance. However, contractors insurance is well worth having to protect you from risks faced regularly as a contractor.

Contractors face a variety of risks every day, 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. Without insurance, contractors could face high expenses (such as legal fees), which they will have to pay for out-of-pocket. This can irreparably harm a contractor's business. Also, note that in many cases, contractors will be required to show proof of insurance before they get a contract and/or begin a job.

Need help? Our team of expert brokers are available to help. We will assess the risks you face on a day-to-day basis, 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 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 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. One of our expert brokers can help a contractor get the coverage he or she needs for their specific trade and business. Below are some common 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.
• Builder's 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.
• 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 Coverage: 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.
• Builder's Risk Coverage: 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.

Important to Note:

1. Be aware that the entirety of these coverages excludes coverage for damage from incorrect design, planning, work, and materials.
2. You should have builder's 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. A reasonable profit can be included by the builder in the coverage amount.
3. If you're seeking to secure builder's risk coverage, you will likely need a performance bond and/or bid bond, and wrap-up liability coverages.

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 to protect yourself from injury, damages, and financial obligations. A contractors insurance policy can be tailored to your needs to protect yourself against legal liabilities properly.

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 insurance considerations for home builders and renovators. We always advise that you speak to a broker to learn about the proper coverages for your specific 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 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.

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 insurance protection. If an error occurs, the client may hold you and your business responsible for damages. Electrical contractor insurance is capable of protecting you from lawsuits that may arise while work is being done or after it has been completed. Make sure to have electrical contractor 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 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.

Insurance for Plumbers

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

Insurance for Plumbers

Although you may be the most experienced plumber, problems can still occur. Even a small 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.

Insurance For HVAC Contractors

If you are contracted to repair or install heating and air conditioning units inside residential or commercial properties, you are advised to carry commercial general liability insurance. HVAC insurance protects you in the event damages occur as a result of 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.

Insurance for Painters

Should damages occur in residential or commercial properties as a result of 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 provides protection for 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 Contractors Insurance Cost in Ontario?

The price of 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 are trained to help with contractors insurance. We will 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. You can 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 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 need to be sure that all subcontractors you work with have their own contractors insurance. It is advised that you obtain a Certificate of Insurance from each subcontract you use, to verify that the subcontractor has commercial general liability insurance in place. You should also ask to be included as an Additional Insured on their insurance policy for work that you have subcontracted them to do.

If you are a subcontractor, it is equally important to have contractors insurance for your own protection. Use the services of a broker to make sure 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, Canada?

At Morison Insurance, our expert brokers can help you to get the contractors insurance coverage you need to be appropriately protected while at work. Our brokers work for you, not an insurance company, and have training in managing the details of contractors insurance. Our team will shop around multiple insurers on your behalf and contact the companies to provide you with several competitive quotes, so you can 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 a variety of quotes. Our team is focused on helping you, and ensuring you get the best contractors insurance possible quickly and simply. No headaches. We know you have a business to run, and time is money. Let our award-winning commercial insurance brokers get you insured with the right contractors insurance tools.

To get started today, we invite you to fill out the online form below or give our qualified brokers a call at 1-800-463-8074.

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.