Contractor Insurance

Contractor Insurance

Get a custom contractors liability insurance quote designed to protect your specific type of construction or trade.

Zensurance - General Contractor

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Independent Contractor

Liability insurance for contractors

As a contractor, managing risk is inherent to your business, so it only makes sense that you have a robust risk management strategy in place for yours. At Zensurance, we know what makes your business unique. With over fifty partners, we’ve helped thousands of contractors protect their businesses with flexible insurance policies customized to meet their specific needs.

Comprehensive coverage that can withstand multiple projects, managing employees, and general business liability risks is critical to running a thriving construction business.

When it comes to finding the perfect coverage for your business, distinct factors, such as trade, location, and service-related risks, need to be considered. For example, snow removal will have very different types and levels of risk exposure than residential painting.

We know what makes your business unique. Our contractor insurance policy packages protect contractors against the specific risks associated with contracting trades, such as third-party property damage and equipment theft.

Each construction practice is different, and insurance requirements will vary by service; however, contractors insurance typically includes the following policies:

  • Commercial General Liability (CGL) Insurance – The most common and perhaps most important form of coverage for contracting trades is commercial general liability insurance. CGL is a liability insurance policy for contractors that protects you and your business against common claims you may run into at a job site, such as third-party property damage (e.g., damaging a client’s home) or bodily injuries (e.g., a slip and fall). Should your business be named in a lawsuit, CGL may cover medical expenses and legal fees, regardless of the outcome. 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. Hiring sub-contractors that carry liability insurance is another way to ensure all parties have adequate coverage.
  • 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.
  • Pollution Liability Insurance – As an industry, construction produces more pollution than aviation. While not every project is going to have a large-scale impact, environmental liability is on the rise. Neglecting to seal a construction site or an improperly fitted pipe can lead to severe damage down the line. Pollution liability insurance covers clean-up costs, bodily injuries (e.g., respiratory illnesses), or property damages (e.g., water damage) caused by pollution or toxic substances produced due to your work on a covered job site.
  • Builder’s Risk Insurance – Also known as Construction Liability Insurance, Builder’s Risk protects your building and liability against expensive property claims throughout a project’s duration. Contractors typically require their clients to carry this coverage, although sometimes you may be responsible. When finalizing the details of a project, be sure to confirm who will be responsible for purchasing the policy and ensure all involved parties are covered.
  • Contractors do not typically require Professional Liability Insurance. However, if you offer advice or consulting as part of your services, consider adding it to your policy to protect against claims alleging you gave incorrect information or failed to deliver a service as promised.

Due to the variation across trades, finding a one-size-fits-all policy may be difficult. Speak with one of our specialized brokers to see if any of these additional coverages are right for your business:

  • Products-Completed Operations Liability – Protects you and your business against customer lawsuits alleging property damage (e.g., faulty pipes) or a bodily injury after you have already completed a service or project.
  • Non-Owned Auto Insurance – Auto coverage for vehicles used in connection with your business that you don’t own, lease, rent, or borrow. For example, this coverage could apply to an employee who uses their vehicle for company business.
  • Tenants Legal Liability – This policy covers loss or damage to property that your rent or occupy (but do not own) for business purposes, such as a temporary office space near a job site.
  • Installation Floater – This is an additional form of coverage, typically included with Builder’s Risk policies, which protect the tools and materials you use during construction from theft, loss, or damage.
  • Leased, Rented, Borrowed Equipment – Coverage for loss or damage to materials and equipment you lease, rent, or borrow.

Any independent contractor or business providing general contracting services should protect their company 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 guaranteed contracting resources that are adequately insured.

We’ve insured thousands of contractors across Canada, some of our clients include:

Contractor insurance starts from $450 annually for a basic CGL policy with a $2M limit for a small or medium-sized business.

When you fill out our online application, we will ask some questions about your business to understand your needs better. 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.

Working as an independent contractor has many benefits; you define your schedule and contribute your expertise to various projects. However, operating independently has unique risks from an insurance perspective. Unless you are working full-time with one company, you are unlikely to be covered by an employer, meaning you need comprehensive insurance that travels to job sites with you.

General liability insurance for independent contractors could cover any third-party injuries during a project or property damage resulting from your actions, even if you work at multiple sites. Equipment and tools insurance will provide coverage should they be lost, damaged, or stolen, and you should always confirm Builder’s Risk coverage is in place before you begin a project. Suppose you offer advice as part of your services. In that case, you may wish to protect yourself with professional liability insurance, as it protects against claims alleging negligence or failure to deliver a service as promised, which can be costly.

Not only will purchasing insurance protect you from financial loss, but it may also help in securing jobs, as project managers and planners will often ask for proof of insurance before making a hiring decision. Having liability insurance for contractor can be the difference between whether or not you secure a contract.

Suggested Coverage: 

  • Commercial General Liability Insurance
  • Builder’s Risk Insurance
  • Tools & Equipment Insurance
  • Professional Liability Insurance

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Common claims scenarios

Contractor causing damage during renovation

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

Outcome: Your commercial general liability policy may cover the cost to repair the kitchen counter, totalling $20,000 in damages.

commercial auto accident

Problem: One of your employees is driving their car to transport tools to a job site. They get into an accident on the way, 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.

contractor tools coverage

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 to rent tools until yours are replaced.

Outcome: Your contractor tools policy may cover the costs of replacing the stolen tools and reimburse you for the rental expenses totalling $15,000.

Frequently asked questions

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.

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.

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.

 

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