Professional Home Builders Insurance

The Right Home Builders Insurance in Ontario

In many countries, most people live in apartment buildings, townhouses or condominiums—but in Canada, the most popular option is a detached house, representing more than half of the total occupied dwellings throughout the country. Whether you build single-family, detached homes, high-rise buildings with dozens of units, or other residential buildings, you provide an essential service that will always be needed. At the same time, the construction industry exposes home builders to a wide range of risks that could lead to severe financial losses without the protection of the right home builders' insurance. Ontario home builders can rely on the expert brokers at Morison Insurance to track down the coverages and limits necessary for your particular business so you can have the total peace of mind that comes with knowing your business is protected against unexpected financial setbacks.

What Is Professional Home Builders Insurance?

Home building can be a risky profession because there are so many opportunities for mistakes, accidents, oversights and errors that could leave the builder liable for astronomical legal fees and settlement costs—not to mention the potential for destructive events such as fires, natural disasters, floods, theft, vandalism and more that could destroy structures, materials, tools and equipment and leave the builder responsible for restoration, repair and replacement costs. 

The solution to this problem is a robust package of home builders insurance. Ontario builders and contractors can protect themselves with this form of business insurance from paying out of pocket for the expenses listed above by getting the right insurance for home builders in place. Professional home builders' insurance will provide commercial general liability coverage and coverage for equipment, tools, and supplies. It can also cover buildings currently under construction, specialized liability issues such as polluting incidents, and much more based on the types of coverages purchased.

Who Needs Home Builders Insurance in Ontario?

Professional home builders' insurance is essential for any business building a dwelling or doing significant renovations. That includes professionals such as:

• Construction business owners
• Home builders
• Renovators
• Remodelers
• House flippers
• Land developers
• Trade contractors

What Are the Coverage Options for Home Builders Insurance in Ontario?

There are many types of insurance coverage and policies for home builders in Ontario to protect the value of a property being constructed or altered and even certain extra costs after an insured claim. Insurance coverages for legal liability resulting from incidents during construction are also available.

Most businesses of any description need some standard types of coverage, such as commercial general liability, commercial property insurance, and commercial auto insurance. There are also more specialized types of coverage, such as builders' risk insurance and completed operations coverage, that are critical additions to home builders' insurance. Ontario brokers at Morison Insurance have the experience and expertise to consult with you and begin a home builders insurance quote to find the right coverages for your circumstances.

Commercial General Liability Insurance

As a fundamental building block of most commercial insurance packages, commercial general liability (CGL) insurance is an essential type of business insurance coverage that every business needs and of course, home builders are no exception to the rule. Commercial general liability insurance covers litigation-related expenses and settlement costs if you are sued because you or your employee allegedly caused third-party injuries or third-party property damage. For example, if you were working on a new build and the chimney structure toppled over, causing damage to the house next door, the owner of the neighbouring property could bring legal action against you to recoup the cost of repairing the damage to their home. Commercial general liability coverage on your home builders insurance policy would provide you with the necessary funds to handle expenses, such as attorney fees and the settlement cost, up to the coverage limits on your policy.

Professional Liability Insurance

Professional liability insurance is another form of liability insurance. It applies to liability issues that cause third-party financial losses. That includes allegations of negligence, misconduct, bad advice, failure to deliver promised products or services and breach of contract. This type of coverage is significant for home builders who provide design and build services or who provide clients with professional advice about the building process.

Builders Risk Insurance

As the name suggests, builders' risk insurance is a necessary coverage for home builders. This insurance is also known as "course of construction" insurance because it applies specifically to buildings currently under construction or undergoing major renovations. A builder's risk policy covers the cost of restoring or repairing damage during construction from various perils such as fire, extreme weather events, theft and vandalism.

It's important to understand that builders' risk insurance must be purchased before the ground is broken on a new construction site. The most significant risk to a building that is under construction is when the building is nearly complete because that's when the most materials and costs are invested into the site, which could potentially be lost or damaged. As a result, if you don't start out with builders risk coverage and try to obtain it partway through construction, insurance companies will decline to provide coverage, backdate the cost to the start of construction or simply charge considerably more than it would have cost to obtain it at the beginning of the project.

Tools and Equipment Coverage

As a home builder, you probably have some costly tools or pieces of equipment that you need in order to do your job efficiently and correctly. Suppose your tools were stolen out of your truck when you stopped to get coffee on your way to a job site, or your equipment was destroyed in a severe collision while driving, or something was stolen when you left it at a job site overnight. In all likelihood, those events would have a significant impact on your current project or projects because they would impede your ability to meet your contractual obligations until the tools and equipment were replaced. There's an additional risk for the tools and equipment in that they are being transported and are on various job sites. It’s essential to have the right tools and equipment coverage. It protects you against paying out of pocket to replace or repair equipment and tools that are vandalized, stolen, or damaged at a job site or during transit, which makes it a critical part of a robust policy for home builders insurance in Ontario.

Additional Types of Coverage for Home Builders Insurance

• Commercial Auto Insurance
• Pollution Liability Insurance
• Commercial Cyber Liability Insurance
• Commercial Property Insurance
• Business Interruption Insurance
• Commercial Umbrella Liability Coverage

Is Insurance for Home Builders Mandatory?

The answer to this question is more complex than just a yes or a no. The government does not legally require home builders insurance, and that's the case with most types of business insurance in Canada. Commercial auto insurance is one exception to that overall rule, as commercial vehicles do need to be insured to be legally driven. However, while the government doesn't require insurance for home builders, it is required by other parties such as clients, subcontractors, and suppliers. Many people will simply refuse to hire or work with a home builder who can't provide proof of insurance in the right types and amounts, and that means you will be forced to walk away from lucrative contracts that your competitors can then snap up.

Even if there's no one asking for proof of insurance or requiring you to have home builders insurance, Ontario construction professionals simply can't afford to go without it and keep their business in good financial condition for long. Home building is a high-risk occupation that is subject to a wide variety of risk exposures, and those risks can have very costly consequences that can easily run into the millions of dollars and keep climbing from there. Needless to say, those types of expenses can't be managed easily and could spell the end of your business as well as create major setbacks for your personal finances. Why put yourself through that stress and hassle when you can get the backing you need to effectively deal with liability and property damage costs by investing in the right home builders insurance in Ontario?

How Are Premium Costs Calculated for Home Builders Insurance in Ontario?

A wide number of considerations go into calculating the cost of premiums for home builders insurance. Ontario brokers at Morison Insurance will start with a home builders insurance quote and begin finding out as much as possible about your business practices, location and more in order to determine the types of coverage you need. Some of the many factors that go into that calculation are:

• Services you offer
• Locations of your business and job sites
• The types of buildings you work on
• Your insurance claims history
• Your experience level and training
• Which tools and equipment do you use
• Safety measures and practices

Where Can I Get A Professional Home Builders Insurance Quote?

If you're ready to start an Ontario home builders insurance quote, our commercial insurance brokers at Morison Insurance are here to help. Call us at 1-800-463-8074 for a quote, or fill out the contact form on this page to get started.

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.