Contractor Insurance

Contractor liability insurance is not universally required by law for every contractor in Ontario, but it may be required by customers, general contractors, landlords or project agreements. It can protect your business against covered claims involving third-party bodily injury or property damage arising from your operations.

The cost of contractor insurance in Ontario depends on your trade, annual revenue, number of employees, work performed, claims history, coverage limits and other factors. A small contractor with straightforward operations may have very different insurance costs than a larger contractor performing higher-risk work.

The insurance an independent contractor needs depends on the work being performed. Contractor liability insurance is commonly considered, while tools and equipment, installation floater, commercial auto, pollution liability and other coverages may also be appropriate depending on the business.

General contractors may require commercial general liability insurance along with coverage for tools, equipment, materials and vehicles. Additional insurance may be required depending on subcontracting, project size and the type of construction work performed.

Tools and equipment may be covered when appropriate tools and equipment insurance is included in the policy. Coverage for theft can depend on where the equipment was located, how it was stored and the terms and exclusions of the policy.

Contractor liability insurance may respond to certain covered third-party property damage claims arising from your operations. However, faulty workmanship and the cost of repairing your own work may be treated differently. Coverage depends on the circumstances and policy wording.

Contractors should confirm the insurance requirements that apply to subcontractors working for them. Requiring subcontractors to maintain their own liability insurance and obtaining current certificates of insurance can be an important part of managing contractor risk.

A Certificate of Insurance provides evidence of insurance coverage at a particular point in time. Customers, general contractors, property owners and other parties may request a certificate before allowing a contractor to begin work.

Depending on the insurer, contractors may be able to place their business liability and commercial vehicle insurance with the same insurance company. Availability and potential discounts vary by insurer and the contractor's operations.

Possibly. Insurance availability for a new contracting business depends on factors such as the contractor's experience, trade, work performed, projected revenue and coverage required. Previous experience in the trade can be particularly important to some insurers.