Contractor Insurance in Ontario: Essential Coverage for Construction & Trades Professionals
Introduction
Running a contracting business in Ontario – whether you're an independent electrician, a general contractor managing large projects, or a specialized tradesperson – exposes you to significant risks that could devastate your business financially. From third-party injury claims at job sites to damage to expensive tools and equipment, contractors face daily exposures that require comprehensive insurance protection.
At Vieira & Associates Insurance Brokers Ltd., we've been protecting Ontario contractors and construction businesses since 1974. With access to over 30 insurance providers and nearly five decades of experience in commercial insurance, we understand the unique risks facing contractors and how to structure coverage that provides robust protection at competitive rates.
Essential Insurance Coverages for Contractors
Commercial General Liability Insurance
Commercial General Liability (CGL) insurance forms the foundation of every contractor's insurance program, protecting your business against third-party claims for bodily injury, property damage, and personal injury.
What CGL Covers for Contractors:
Bodily Injury Liability: If a client, visitor, or passerby is injured at your job site or due to your work, CGL covers medical expenses, legal defense costs, and settlements or judgments.
Property Damage Liability: Covers damage your work causes to others' property, such as accidentally damaging a client's existing structure while performing renovations or breaking underground utilities during excavation.
Completed Operations Coverage: Protects against claims arising after work is finished, such as a deck collapsing due to construction defect or electrical fire caused by faulty wiring installation.
Typical Coverage Limits: Most Ontario contractors carry $2-5 million in CGL coverage. Many commercial clients require proof of at least $2 million as a condition of contracts.
Tools and Equipment Insurance
Contractors invest tens of thousands of dollars in tools and equipment essential to their operations. Theft, damage, and loss of this equipment can halt business operations.
Coverage Options: Inland Marine/Tools Coverage protects tools and equipment wherever you work, including hand and power tools, ladders and scaffolding, specialized trade equipment, and small machinery.
Understanding Certificates of Insurance (COIs)
Most commercial and residential clients require contractors to provide Certificates of Insurance before starting work. Your insurance broker can typically provide Certificates of Insurance within 24 hours at no charge. Never start work without providing required COIs, as this may breach your contract and void your insurance protection.
WSIB vs. Commercial Insurance Coverage
WSIB Coverage: Mandatory for contractors with employees, covers workplace injuries to your employees, and protects contractors from employee injury lawsuits.
Commercial Insurance Coverage: Protects against third-party claims (not your employees), covers property damage and bodily injury to others, and is required by most clients and contracts.
