General contractors, subcontractors, and construction small business owners know they must have liability insurance.

It’s often a legal or regulatory requirement for these professionals to be insured and have a valid certificate of insurance to prove it to their clients and partners.

Construction liability insurance is fundamental to responsible and professional construction business operations. It provides financial protection against various risks and offers peace of mind to construction professionals and their clients.

Whether it’s a course of construction insurance policy (also called builder’s risk insurance), contractors all-risk insurance policy, or a contractor insurance policy, each is designed to address the risks these professionals face doing their hard work.

Construction liability insurance

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10 Benefits of Having Construction Liability Insurance

Beyond being legally required to carry insurance, here are 10 benefits every contractor, renovation expert, handyman, or construction business owner can realize by being insured:

1. Third-Party Bodily Injury Coverage

If a client or passerby suffers an injury on a job site, their medical and rehabilitation expenses are covered by your policy.

2. Third-Party Property Damage Coverage

Insurance can cover the cost of repairing or replacing the damaged property if you accidentally damage a client’s or a neighbouring property during work.

3. Contractual Liability Coverage

Protects contractors from third-party bodily injury or property damage claims as per the contracts they sign with their clients. Contractual liability insurance covers contractors from a contract’s indemnity or ‘hold-harmless’ clause.

4. Completed Operations Coverage

Your contractor liability insurance may also cover claims arising from work you did in the past.

5. Compliance with Regulatory Requirements

Many provinces have laws which require contractors to have insurance to obtain a business license.

6. Coverage for Your Tools and Equipment

The theft of tools and equipment from construction sites is common. Insurance helps to offset that risk by replacing your tools or equipment if they’re stolen, like when it happened recently to one of our contractor clients

7. Business Continuity and Risk Mitigation

If you need to file a claim for damage and loss, your policy ensures the continuity of your business by covering the costs and potential settlements. Insurance helps contractors proactively manage their risks by providing a safety net in case of accidents or unforeseen events.

8. Loan and Leasing Requirements

If you apply for a business loan, most financial institutions will require you to have liability insurance, or they won’t fund your business. Likewise, if you’re renting or leasing an office space, the landlord will want to see your certificate of insurance as a condition of leasing a commercial space to you. 

9. Client Confidence

Your clients are more likely to have confidence in your business and work if you’re insured. That can lead to high satisfaction, which may result in them referring you to others and securing new contracts.

10. Long-Term Viability and a Competitive Edge

Insurance helps ensure your business’s financial health and stability, reputation, and long-term success by protecting you against expensive losses due to accidents or unforeseen risks. Insurance also gives you a competitive edge in signing new clients over those who do not, as clients will often only hire insured professionals.

How to Get the Construction Insurance You Need Now

Construction and renovation work is demanding and tough. Getting the comprehensive construction liability insurance policy you need shouldn’t be. Zensurance can tackle that project for you.

Fill out our online application for a free quote and let our experienced brokers get the low-cost policy you need, advise you on your options, and customize the policy to suit your business.

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About the Author: Yassin Elsayed

Yassin Elsayed is a Team Lead, Contractors at Zensurance.