Commercial General Liability Insurance for Contractors Insurance
Protect your contracting business with Commercial General Liability Insurance covering eligible thirdparty bodily injury, property damage and legal defence costs
What is Commercial General Liability Insurance for Contractors?
Commercial General Liability (CGL) Insurance helps protect contractors against covered third-party claims, including bodily injury, property damage and personal injury. It may also cover eligible legal defence costs, settlements and judgments, subject to the policy terms, conditions and exclusions.
What Does Commercial General Liability Insurance for a Contractor Cover?
| Covered Claim | Description |
|---|---|
| Third-Party Property Damage | Helps protect against covered claims if your business accidentally damages someone else's property during your operations. |
| Third-Party Bodily Injury | Helps protect against covered claims if someone suffers bodily injury and your business is alleged to be legally responsible. |
| Legal Defence Costs | May help cover eligible legal fees and defence costs associated with a covered liability claim or lawsuit. |
What Isn't Covered?
| Generally Not Covered | Description |
|---|---|
| Faulty Workmanship | Commercial General Liability Insurance generally does not cover the cost to repair or replace your own faulty work. |
| Employee Injuries | Workplace injuries are generally covered under provincial workers' compensation programs such as WSIB, not a Commercial General Liability policy. |
| Damage to Your Own Work | Damage to your own work or products may not be covered, subject to the policy wording and applicable exceptions. |
| Intentional Acts | Deliberate or intentional acts are generally not covered under a Commercial General Liability policy. |
| Professional Services | Claims arising solely from professional advice, design or consulting services generally require Professional Liability (Errors & Omissions) Insurance. |
Commercial General Liability Insurance by Trade
Commercial General Liability Insurance is one of the core coverages for contractors across many different trades. While the coverage is similar, each trade has unique liability exposures.
Common Commercial General Liability Claims
| Claim Example | Incident Summary | Total Loss / Payout | Contractor Pays (Deductible) | Insurer Pays | Annual Policy Cost | Proactive Post-Claim Safety Measures |
|---|---|---|---|---|---|---|
| Cable / Ethernet Installer | Drilled through a wall and struck a main water line, causing significant water damage to floors and lower-level walls in a senior's residence. | $83,500 | $1,000 | $82,500 | $1,500 | Verified utility plans before drilling • Used third-party utility locating • Introduced additional site risk procedures |
| Bricklayer | Knocked over a heavy tool while setting up scaffolding, breaking a custom home's bay window and damaging finished interior work. | $10,500 | $1,000 | $9,500 | $1,450 | Improved scaffolding setup training • Added equipment stability checks • Strengthened site perimeter procedures |
| Roofer | Dropped a heavy bundle of shingles from a roof onto a client's parked vehicle, damaging the hood and windshield. | $26,000 | $5,000 | $21,000 | $8,500 | Secured roofing materials before handling • Established vehicle-free drop zones • Improved material-handling procedures |
Claim examples are for illustration only. Coverage and claim outcomes vary based on the circumstances, policy terms, deductibles, limits and exclusions.
Contractors CGL FAQ
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Is Commercial General Liability Insurance mandatory for contractors?
Commercial General Liability Insurance is generally not legally required in Ontario. However, many clients, municipalities, general contractors and project owners require contractors to carry liability insurance before work begins.
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Is Commercial General Liability Insurance required for government projects?
Many government, municipal and public-sector contracts require Commercial General Liability Insurance and may specify minimum liability limits such as $2 million, $5 million or more.
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Does Commercial General Liability Insurance cover subcontractors?
It depends on your policy wording and the contractual relationship. Always discuss subcontractor exposures with your insurance broker to ensure your business is properly protected.
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Does Commercial General Liability Insurance cover faulty workmanship?
Generally, Commercial General Liability Insurance does not cover the cost of repairing or replacing your own faulty workmanship. However, resulting damage to other property may be treated differently depending on the policy wording and the circumstances of the claim.
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Does Commercial General Liability Insurance cover completed work?
Many Commercial General Liability policies include Products and Completed Operations coverage, which may help protect against covered claims arising after your work has been completed, subject to the policy wording.
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Does Commercial General Liability Insurance cover rented equipment?
Commercial General Liability Insurance generally does not insure rented tools or equipment against damage or theft. Separate equipment or rental insurance may be required depending on the circumstances.
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How much Commercial General Liability Insurance do contractors need?
The appropriate liability limit depends on your trade, contract requirements, project size and risk exposure. Many Ontario contractors purchase $2 million or $5 million in Commercial General Liability Insurance.
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Is $2 Million Commercial General Liability Insurance Enough?
While $2 million may satisfy the requirements of some contracts, many contractors today choose $5 million in Commercial General Liability Insurance, particularly as claim costs and legal awards continue to increase.
When deciding on a liability limit, consider more than just the minimum contract requirement. Ask yourself: If your business were found legally liable for a serious third-party injury or property damage claim, how much of your own assets would you be prepared to risk?
For many contractors, the additional cost of increasing liability limits is small compared to the financial protection it can provide.
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Do I Need $5 Million Commercial General Liability Insurance?
Many commercial, industrial and government projects require $5 million in Commercial General Liability Insurance. Even when it isn't contractually required, many contractors choose higher limits to better protect their business from potentially significant liability claims.
Rather than asking, "What's the minimum I need?", consider asking: "What liability limit would allow me to confidently continue operating my business if a major claim occurred?"
Your broker can help you determine an appropriate liability limit based on your trade, operations, project size and overall risk exposure.
Related Contractor Coverages
Commercial Auto
Coverage for vehicles used in your contracting business
Tools & Equipment Insurance
Protection for eligible contractor tools and equipment
Installation Floater
Coverage for eligible materials before and during installation
Pollution Liability
Coverage for eligible pollution liability exposures
Wrap-Up Liability
Project-specific liability insurance for construction projects
Crime / Employee Dishonesty
Protection against covered employee dishonesty loss
Why Humberview for Contractor Insurance?
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One Dedicated Broker
Work with the same licensed broker who understands your business.
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Independent Since 1982
Serving Ontario businesses and contractors for over 40 years.
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Multiple Insurance Markets
Compare coverage options from multiple insurance companies.
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Coverage That Fits Your Trade
Insurance tailored to your operations, equipment and business needs
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