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Contractors Insurance

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Ontario Contractors Insurance

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. Insurance protection is essential. The right contractors insurance protection is an absolute must. If you don't have the right contractors insurance and you have a loss, you could be left with inadequate insurance coverage or no insurance coverage. It's like having pliers when you really needed a drill.

Insurance brokers are here to provide you with information you need to know about contractors insurance. An insurance broker with specialized training in commercial insurance can assist you through the process of getting contractors insurance that meets your needs. Our goal as commercial insurance brokers is to provide you with contractors insurance 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 insurance brokers represents the most reputable insurers in Ontario and will arrange comprehensive insurance coverage for all aspects of your construction 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, and a variety of extra expenses should a loss occur.

What is Contractors Insurance?

Contractors Insurance is a specialized insurance package tailored to a contractors specific type of work. It usually consists of contractors commercial general liability insurance with commercial building insurance and property, tools and equipment insurance, and commercial automobile insurance. In addition to these coverages, additional coverages 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 to cover with insurance?
  • Do you hire subcontractors or have employees who drive vehicles?
  • Do you have one office, a home office, or several offices?

Commercial insurance brokers know that it can be difficult and time-consuming for a contractor to assess their risks accurately. A commercial insurance broker specializes in risk assessment and can make the process simpler and faster. A commercial insurance broker will ask questions about your company, such as what work is done, the size of your business, and how many employees you have. A commercial insurance broker will get to know your business so they can help you to determine the Ontario contractor's insurance you should have.

Contractors Insurance - Morison Insurance - Ontario, Canada

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 construction job, construction areas, and projects under the care, custody, and control of the general contractor. The insurance covers 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. The 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 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 construction trade, contractors commercial general liability insurance is a good protection to have.

Contractors Commercial General Liability Insurance includes:

  • Protection against lawsuits or claims arising from property damage and bodily injury that may occur on a construction job.
  • Protection for construction areas and 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.

Note: Commercial general liability insurance does not cover everything. There are additional insurance coverages you should have as a contractor. Several other coverages are discussed later in this article.

We advise you to contact a commercial insurance broker to discuss your specific and individual insurance needs to ensure your insurance needs are met.

It is important to know 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.

Who Needs Contractors Insurance?

If you perform construction 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 & air conditioning contractors
  • Plumbing and electrical contractors
  • Residential handyman companies
  • Excavating contractors
  • Mechanical contractors
  • Roofers
  • Restoration companies
  • Commercial and residential new construction companies
  • Environmental contractors
  • Drywall installers
  • Painters
  • And others

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 is done 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, contractors insurance is good to have.

If you do not have the proper insurance, you and your business could be found legally liable, which may result in millions of dollars of financial loss to 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 insurance 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 a commercial insurance broker to find out what coverage you need and the cost of Ontario contractors insurance.

Contractors Insurance - Morison Insurance Brokers - Ontario, Canada

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 costs (such as legal fees), which they will have to pay for themselves. This can irreparably harm a contractors 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? Commercial insurance brokers are available to help. Commercial insurance brokers will assess the risks, explains coverages and insurance terms, and find contractors insurance that suits the contractors needs.

Why Do Contractors Need Insurance?

Contractors insurance is recommended insurance 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 construction professionals 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 an excellent necessary insurance protection. There are also other types of insurance that a contractor should have, such as builder’s risk coverage. To learn more about contractors insurance and your specific needs, contact an insurance broker who specializes in commercial insurance.

What Does Contractors Insurance Cover?

There are a variety of insurance coverages available. A commercial insurance broker can help a contractor to get the coverage needed for their specific trade and business. Below are some common contractor's insurance coverages.

  • General Liability Insurance – This insurance protects you from bodily injury and property damage lawsuits and covers damages that can occur due to your business operations.
  • Commercial Property Insurance – This protectsyour building(s) and office equipment.
  • Installation Floaters – This provides course of construction coverage for the insured's property and property of others being installed or waiting to be installed. It helps to protect contractors and service providers from the exposures they face during installation.
  • Equipment insurance – This insurance protects equipment from vandalism or theft while in your vehicle or at a job site.
  • Commercial Vehicle Insurance– In Ontario, businesses must have liability and accident benefit coverage, and contractor's might also need other optional automobile coverages such as collision and comprehensive coverage.
  • Course of Construction Coverage – Course of construction coverage is also known as builder's risk insurance. It protects owners and contractors from the impact of fires, floods, vandalism, theft, and other potential construction project incidents.
  • Performance Bond – Performance Bond provides a financial guarantee for the completion of the commercial or construction project. It provides protection to the person who has hired your services in the event you are unable to complete the project.
  • Bid bond – Bid bond 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 insurance – Wrap-up liability insurance is often used on large construction projects. It protects the owner, contractors, and others involved for a specified time after construction is done. This coverage includes bodily injury and property damage losses the insured becomes legally obligated to pay.
  • Error and Omissions Coverage – Errors and Omissions – sometimes called E & O coverage – covers 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 is sometimes called "course of construction coverage”, and is designed to protect against property loss and provide coverage for buildings during construction. 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 construction site.
  • Builder's Risk Coverage – This offers flexible coverage options to meet the specific insurance needs residential or commercial construction projects. Brokers can tailor a policy specifically to your exposure.

Two important notes:

  1. Be aware that the entirety of these coverages excludes coverage for damage from incorrect design, planning, work, and materials.
  2. Also note that you shouldhave 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.

Note that if you are seeking to secure builder's risk, you will probably need a performance bond and/or bid bond and wrap-up liability coverages.

In summary: 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 construction 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. Construction can be complicated, and building projects can take a long time to complete. With the number of things involved when constructing or renovating a home, it is inevitable something at some time will go wrong. 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 commercial insurance broker to learn about the proper coverages for your specific home building or renovation company.

Home Builder Insurance - Contractors Insurance - Morison Insurance - Ontario, Canada

 Essential Coverages for Home Builders

  • General Liability Insurance – General liability insurance covers bodily injury or property damage. Note that it does not cover the contractor or builder’s property because this is covered by course of construction insurance, which is detailed below.
  • Course of Construction Insurance – Course of Construction Insurance in Ontario is also known as builders insurance. Every builder - whether constructing custom homes or community projects - or renovators should have course of construction insurance. Builder’s risk insurance covers premises under construction. 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.

Be aware that builder’s risk insurance does not cover everything. For example, most builder’s risk insurance does not include tools or equipment; however, insurance can be provided for this.

* Note also that course of construction insurance should be in place before work begins on a project. 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 – Wrap-up insurance is a policy that is specific to a project and provides commercial general liability coverage for all contractors and sub-contractors. 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 service 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 the type of insurance that is capable of protecting you from lawsuits that may arise while work is done or after it has been completed. Make sure to have electrical contractor Insurance no matter how large or small the job.

Electrician Insurance - Contractors Insurance - Morison Insurance - Ontario, Canada

Essential Coverages for Electricians

  • General Liability Insurance - General liability insurance is a must for electrical contractors. This insurance for electricians provides protection in case of lawsuits that may be launched for alleged poor work.
  • Commercial Automobile Insurance - Electricians drive to work, and commercial auto insurance is highly recommended. This insurance can protect company vehicles, such as vans, trucks, and others.

Additional insurance coverage for electricians to consider:

  • Commercial Property Insurance - A commercial property policy is a good insurance 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 - Workers' Compensation coverage is a necessity for any electrical contractor. This type of insurance protects employees if they get sick or injured on the job.

Insurance for Plumbers

Although you may be the most professional plumber, problems can still occur. Even a small mistake could lead to thousands and thousands of dollars' worth of damages. For example, if pipes leak or there is a flood, a client may bring a lawsuit against your business. Plumbers insurance is a good protection to have.

Plumbers Insurance -Contractors Insurance - Morison Insurance - Ontario, Canada

Must-have insurance for Plumbers

  • General Liability Insurance - General liability insurance is essential for plumbing contractors. It will protect you from lawsuits and other liabilities that may arise with on-site accidents and other mishaps.
  • Commercial Automobile Insurance - Plumbers drive to job sites, and commercial auto insurance is highly recommended. This insurance can protect all company vehicles, including trucks and vans.

Other Insurance options for Plumbers

  • Commercial Property Insurance - A commercial property policy is a good option for plumbers who are looking for comprehensive insurance coverage. This kind of policy can protect additional items associated with a plumber's business activities such as personal property, tools, commercial buildings, equipment.
  • Worker's Compensation Coverage - Workers' compensation coverage is a necessity for plumbers to protect employees if they are injured or become ill on the job.

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 contractors insurance protects the professional in the event damages occur as a result of their 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 Insurance -Contractors Insurance - Morison Insurance - Ontario, Canada

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 drive to work, they should have commercial auto insurance to cover all company vehicles such as trucks and vans.

Other optional insurance coverages for HVAC contractors

  • Commercial Property insurance -Commercial property policy is comprehensive coverage that protects items such as tools, equipment, commercial buildings, and personal property.
  • Worker's Compensation Coverage - Workers' compensation 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 painter and the company may be responsible for any financial losses. Painters insurance and commercial general liability insurance provides protection for these kinds of claims.

Painters Insurance - Contractors Insurance - Morison Insurance - Ontario, Canada

Must-have coverages for Painters and Painting Contractors

  •  General Liability Insurance - General liability insurance protects painting contractors and painters from lawsuits that may arise for errors or damages.
  •  Commercial Automobile Insurance - Commercial auto insurance is recommended because painters drive to their worksites, and this coverage includes company vehicles, such as trucks and vans.

Other Options that Painter Contractors may need

  •  Environment Liability - If your work results in pollution to the environment and needs cleanup, this Contractor's Insurance coverage will respond to the emergency.

How much does Contractors Insurance Cost?

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 insurance costs.
  • What is the size of your business? How many employees do you have?
  • 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?

Commercial insurance brokers are trained to help with contractors insurance. They will get to know about your business, help you to assess your risks and answer any questions you may have. A commercial insurance broker will contact several insurance companies to get you several contractor's insurance quotes. You can review the quotes and discuss the coverages with the business insurance broker before determining which insurance 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 construction duties. 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 insurance. It is advised that you get an insurance certificate verifying that the subcontractor has commercial general liability insurance. You should also ask to be included as an additional insured concerning work for which you have subcontracted them to do.

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

Want to learn more about running a construction business in Ontario? FedDev Ontario has lots of info about  running a construction business,  regulations, licences, certificates, safety, the building code, warranties, health and safety, and more.

How Do I Get Contractors Insurance?

A commercial insurance broker can help you to get the contractors insurance coverage; you need to be appropriately protected in your work.

The expertise of a commercial insurance broker does not cost the Contractor anything. Commercial insurance brokers work for you – not an insurance company - and have training in the details of contractor's insurance. Commercial insurance brokers represent several insurance companies. They will contact the companies to get you several competitive quotes, so you are sure you get a competitive price on your insurance.

The commercial broker will ask for some details on your business, discuss your insurance needs, and contact several companies to get you a variety of prices. Commercial insurance brokers are focused on helping you.

The commercial insurance broker's goal is to get your contractors insurance 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.


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.

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