Contractor Insurance

Contractor Insurance

No matter the size of your business, all contractors should have insurance coverage.
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Professional Contractor Insurance
Hi, my name is Matt, and I’m a business insurance broker specialized in Contractor Insurance here at Zensurance Today I’d like to speak to you about Contractor Insurance for Canadians. Individual contractors, companies, and sub-contractors should consider getting insurance to protect their business, their employees, and their equipment. Having contractor insurance is not only a smart business practice but is many times mandatory in order to perform jobs where the client requests proof of insurance. So what exactly is Contractor Insurance? Contractor insurance is also known as Contractor Liability Insurance or General Contractor Insurance. It’s a package specially designed for risks associated with construction trades in Canada. These risks can include working with hazardous materials and tools, traveling to different locations, accessing the private property, and potentially causing injuries to 3rd parties. Now, let’s look at which trades need Contractor Insurance. The answer is all of them! Some of the most common ones are construction and renovation contractors for both commercial and residential projects, carpenters, electricians, HVAC installers, roofers, and landscapers.  So, what types of insurance policies do contractors need? Here are some common coverages that can make up your policy. Commercial General Liability, which provides basic coverage against claims of property damage or personal injury. Also, your Tools and Equipment policy, which usually covers tools and equipment that are lost or stolen on your site.  And optionally, you can include an Installation floater policy: This covers materials that are used for the final project that may be damaged while being installed. For example, a window that brakes while it is being installed.  Additional coverage for specific needs can always be added to your basic policy. You should speak to your commercial insurance broker at Zensurance for more options. Some common scenarios where contract insurance can be useful are:
  • A homeowner trips over some materials that you left behind at the site and injures themselves badly and decides to sue you.
  • Or, for example, you are performing a job, and some expensive tools that you left overnight at the site are stolen.
 Now, of course, the big question, how much does a contractor policy cost? The short answer is: it depends. The cost of contractor’s insurance varies according to factors such as the specific trade you are in, the number of years you have been in the business, and the revenue for the past year. On average, the most basic contractor’s insurance starts at around $500 per year and can cover up to $5,000,000 in liability. Of course, as more coverage is needed or if you need to add a specific coverage, the cost will likely increase. Now, how do I get a quote? This is the easiest part. Simply head over to www.zensurance.com, click on get a quote, and in a matter of minutes, you’ll receive your contractor’s insurance quote. Get started today!

What is Contractor Insurance?

Insurance for contractors (Contractors Insurance) is designed to protect against the specific risks associated with contracting trades, such as third-party property damage and equipment theft.

Mistakes can happen and disrupt your business in a matter of minutes. We know what makes your business unique, leave it to us to find the best fit for you.

Contractor insurance coverage

What does Contractor Insurance cover?

The most common policy types for contractors are:

Commercial General Liability Insurance (CGL): CGL is a business insurance policy that protects you and your business from common risks you can expect to face as a contractor, such as third-party property damage and bodily injuries. CGL also covers legal and medical costs; should you be successfully sued.

Equipment & Tools Insurance: Coverage for equipment and tools covers equipment and their accessories, the property of others in your care, and portable business tools from loss or damage, including theft. Anything valued at less than $1,500.00 is considered a tool, while anything above is considered equipment.

Pollution Liability Insurance: Coverage to protect contractors against the specific risks and environmental liabilities associated with exposure to pollution while working on a covered job site.

Each insurance provider is unique, and this coverage may vary.

Coverage highlights for contractors can include: 

  • Products & Completed Operations Liability: coverage for bodily image and property damage resulting from your completed product or service that occurs away from your business premises.
  • Non-owned Automobile: auto insurance for vehicles used in connection with your business that you don’t own, lease, rent, or borrow — for example, an employee who uses their truck for company purposes. 
  • Tenants Legal Liability: coverage for loss or damage to property that you rent or occupy (but do not own) for business purposes. 
  • Medical Payments: covers the medical expenses for a bodily injury regardless of the fault including medical, dental, and hospital services, 
  • Installation Form: includes the installation materials you have waiting at a job site. 
  • Extra Expense: covers the necessary additional expenses required to continue business after experiencing an insured loss. 
  • Leased, Rented, Borrowed Equipment: covers the materials you lease, rent, or borrow from damage or loss. 
  • Rental Reimbursement: covers expenses to rent equipment if your equipment has been damaged and is currently undergoing repairs. 
  • Loss of Earnings: covers lost income resulting from business interruption due to damaged equipment.

Coverage exclusions for contractors can include: 

  • Expected or intended injury
  • Professional services
  • Contractual liability 
  • Intentional criminal acts
  • Wear and tear to tools and equipment
contractor insurance requirements

Who needs Contractor Insurance?

Any individual or business providing contracting services should protect their business with a Contractor Insurance policy package.

Not only will it protect you from financial loss, but it will also help in securing jobs. In today’s increasingly litigious society, clients want to see that they have secured contracting resources that are adequately insured.

We’ve insured more than 1,000 contractors. Some of our clients include: 

  • Commercial Contractors
  • Construction contractors
  • Carpenters
  • Electricians
  • Plumbers
  • Landscapers
contractor insurance costs

What is the cost of Contractor Insurance?

For a small to medium-sized contracting business, you can anticipate spending $450.00 annually on a basic CGL policy with a $2,000,000.00 limit.

When you fill out our online application, we will ask some questions about your business to better understand your needs. The following factors are taken into consideration when determining the best policy options for you: 

  • Years of Experience 
  • Trade Types
  • Annual and Projected Gross Revenue
  • Number of Employees
  • Previous Insurance Claims

We’ve partnered with over fifty insurance providers to offer you different options that suit your business needs at the best price.

Getting insured is quick and easy!

If Contractor Insurance is what you need, request a free quote now!

Common Scenarios where Contractor Insurance is useful

Contractor Injury Insurance

Problem: You are hired to install new kitchen cabinets for a client and accidentally damage their kitchen floors. 

Outcome: Your CGL policy may cover the cost to repair the kitchen floors, totalling $20,000.00 in damages.

Contractor Insurance Liability

Problem: One of your employees is driving their car to transport tools to a job-site. They get into an accident on-route, damaging both vehicles involved.

Outcome: Your employee is found to be at fault for the accident. Your CGL policy may cover auto repairs for both vehicles under the non-owned automobile coverage, totalling $35,000.00.

Contractor Tools Insurance

Problem: Your tools are stolen out of your truck parked at a job-site. You have a large contract with a new client the following day, making it necessary for you to rent tools until yours are replaced.

Outcome: Your portable business tools policy may cover the costs of replacing the stolen tools and reimbursing you for the rental expenses. The total cost was $15,000.00

Frequently Asked Questions about Contractor Insurance

Is Contractor Insurance mandatory for contractors and subcontractors before signing project contracts?

No, having Contractors Insurance is not mandatory, but here are some reasons why you should:

  • There are many risks involved in a contracting project, e.g., on-site injury, equipment, and property damage, any of which could lead to financial loss if a client files a claim against you.
  • For risk-management purposes, project managers and planners will often ask for proof of insurance before making a hiring decision. Having Contractor Insurance can be the difference between whether or not you secure a contract.

 

Do contractors need Professional Liability coverage in their insurance policy?

Contractors do not require Professional Liability Insurance. However, if you offer advice as part of your service, consider adding it to your policy to protect against claims alleging you gave incorrect information or failed to deliver a service as promised.

If you’re still not sure if Professional Liability Insurance is something you need, ask your broker about what types of coverage make the most sense for your business.

Are subcontractors covered by the contractor’s Liability Insurance?

Contractor Insurance provides coverage for full-time employees of a business. This policy does not typically include subcontractors; however, if needed, they can be added. Regardless, it is important to ensure you are meeting all insurance requirements in a contract.

Important note for contractors, your policy coverage limit applies to all employees of your business, not each employee. One option to accommodate all of your employees is to increase your limit. However, hiring subcontractors that carry their own liability insurance ensures all parties have adequate coverage.

For subcontractors, consider purchasing liability insurance to ensure you always have coverage, even when an employer can’t cover you. Having liability insurance will also allow you to work on multiple sites.

Which professions need Contractor Insurance?

Regardless of the contracting services you provide, Contractor Insurance is critical to protect you and your business. Some of our clients include:

  • Alterations, renovations or repairs

  • Appliance repair

  • Antenna and satellite installation

  • Appliance repair

  • Cable installers

  • Ceiling installations/renovations

  • Chimney cleaning

  • Cleaners

  • Doors, windows, siding, awnings

  • Decks and fencing

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