Liability insurance for BC contractors
From Vancouver to Victoria, Surrey to Whistler, Kelowna to Kamloops, independent contractors, tradespeople, and small contractor business owners across British Columbia face a wide range of risks. There were approximately 25,000 general contractors and 43,000 subcontractor companies registered in British Columbia in 2019.
Comprehensive liability insurance for contractors in B.C. covers the broad range of risks independent contractors and tradespeople face. Whether you’re involved throughout an entire project or for a portion of one, there is much that unfolds from the initial planning process to the actual work. Different types of contractors face different risks, from third-party liability lawsuit claims to damages or losses occurring because of severe weather or unexpected events. For instance, the risk exposure roofers face is different from those of a plumber or electrician.
Get a customized liability insurance package to protect your contracting business from unforeseen accidents.
What does it cover?
A comprehensive insurance policy for all kinds of contractors may include the following types of coverages:
- Commercial General Liability (CGL) Insurance: CGL is a liability insurance policy for contractors that protects you and your business against common claims such as third-party property damage or bodily injuries (if a customer visiting your office slips, falls, and is injured). Should you or your business be named in a lawsuit, CGL may cover a customer’s medical expenses and your legal fees regardless of the outcome. However, your CGL coverage limit applies to all employees of your business, not each employee. If you are a small business owner, speak to one of our licensed brokers to increase your CGL coverage limit.
- Commercial Property Insurance: Commercial property insurance protects your business or facility, as well as its contents (including your inventory) from insured risks that occur beyond your control, like a fire, theft, or flood. Carrying commercial property insurance gives you the option of getting business interruption coverage, which reimburses the net income lost following an insured event. It may also cover overhead costs, employee wages, and other costs associated with temporarily closing your business. However, business interruption coverage does not cover income lost due to a pandemic, infectious disease, or a government-mandated closure.
- Tools and Equipment Insurance: Your tools and equipment are likely your most important assets, making equipment and tools insurance critical. This policy provides coverage to replace, or repair lost or damaged equipment and tools, accessories, or others’ property in your care. Anything valued at less than $1,500 is considered a tool, whereas anything above is considered equipment.
- Builder’s Risk Insurance: Also referred to as construction liability insurance, builder’s risk coverage protects your building against expensive third-party property claims throughout a project’s duration. Contractors typically require their clients to carry this coverage, although sometimes you may be responsible. Before finalizing the details of any project, be sure to confirm with your client who is responsible for purchasing the policy and ensure everyone involved are adequately covered.
- Pollution Liability Insurance: Some contractors’ work does have an impact on the environment, and environmental liability is on the rise. Pollution liability insurance covers clean-up costs, third-party bodily injuries (such as a respiratory illness), or damage to a customer’s property caused by pollution or toxic substances produced due to your work.
- Commercial Auto Insurance: Commercial auto insurance, also known as commercial vehicle insurance or business auto insurance, provides coverage for vehicles such as cars, trucks, vans, and trailers used for business purposes. Any vehicle that is used to transport materials, tools and equipment, packaged goods or people in BC should have a commercial auto policy.
- Professional Liability Insurance: Also known as errors and omissions (E&O) insurance, if you provide your customers with advice or consulting services, consider adding professional liability coverage to your policy to protect against claims alleging you gave incorrect information or failed to deliver a service as promised.
- Cyber Liability Insurance: Cyber liability insurance is one of the most critical coverages to have if you’re storing your customers’ data. If you collect and store your customers’ personal or financial information, it is your responsibility to protect their data. Cyber liability insurance covers costs associated with electronic incidents, such as cyber-attacks on your computing systems and data breaches.
- Tenant Legal Liability Insurance: Tenant legal liability coverage insures any loss or damage to the property that you rent or occupy (but do not own) for your business.
- Leased, Rented, Borrowed Equipment Insurance: This type of coverage accounts for loss or damage to any materials and equipment you use that you lease, rent, or borrow for a specific project.
Do all independent contractors in BC need insurance?
Yes. All tradespeople, independent contractors, and subcontractors in every industry need protection. Often, the work you do requires a valid certificate of insurance to assure your clients you are insured. It may be a B.C. licensing requirement, or a necessity to obtain a municipal permit for a worksite. Regardless, it’s a wise, strategic move to safeguard yourself from third-party lawsuit claims and damages or losses resulting from unforeseen events, such as a flood or fire.
Zensurance helps independent contractors in B.C. across various industries find the coverage they need, including:
How much does contractors’ insurance cost in BC?
The cost of a basic or standard contractor insurance policy in B.C. typically starts at $550 per year. There may be other factors related to your type of work or business that apply to the cost of an annual premium, as different insurers offer different prices based on several factors, such as:
- The industry you’re in and the services you provide
- Your business’s size and location
- How many employees you have
- Years of experience
- Your annual and projected revenues
- Your history of insurance claims
Most contractors in B.C. buy a policy with up to $2 million of general liability coverage; however, you can increase your coverage limit to $5 million. Speak to one of our licensed insurance brokers to better understand what options you have and ensure all possible risks you face are accounted for in your policy. If something goes wrong, the last thing you want is to have your claim rejected by your insurance company because you didn’t have the right kind of coverage.
Common claims scenarios
Resources for BC contractors