Demolition Insurance

Demolition Insurance

Demolition contractors face significant risks arising from the nature of their work. Protect your business with a comprehensive demolition insurance policy.

Zensurance - Demolition Contractor

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Demolition Contractor

Insurance for demolition contractors

Demolishing and tearing down buildings and other structures, doing interior demolitions, or deconstructing buildings is necessary to work to revitalize any community, but it’s also fraught with risks ranging from pollution exposure to third-party bodily injury and property damage. Insurance for demolition contractors can help provide financial coverage for risks common to this industry.

Demolition insurance also called wrecking insurance or bulldozing liability coverage, is a customized policy that’s designed to safeguard demolition and deconstruction contractors and wrecking operations by providing financial coverage for common risks such as third-party bodily injury and property damage claims or lawsuits.

Tearing down buildings presents a high risk of third-party injuries and property damage. Therefore, it is important to have insurance coverage specifically designed for the risks you encounter and the equipment you own. A comprehensive demolition insurance policy typically includes the following coverages:

  • Commercial General Liability (CGL) Insurance: CGL provides financial cover for third-party bodily injury or property damage claims or lawsuits because of your demolition company’s regular activities. Whether an incident or accident takes place on your premises (such as a customer visiting your office and being injured in a fall) or a worksite, CGL is designed to pay compensatory damages and your legal defence fees if you’re sued.
  • Pollution Liability Insurance: Demolition and deconstruction projects involve environmental hazards such as unsettling asbestos or creating dust and debris. Pollution liability coverage protects you from the cost of third-party bodily injury, property damage, and environmental damage resulting from your work whether sudden or gradual. It provides funds for civil fines, emergency cleanup costs, and assessments.
  • Tools and Equipment Insurance: A form of property insurance, tools and equipment coverage provides funds to repair or replace your tools and equipment if they are damaged by fire, flood, or vandalism, or if they’re lost or stolen. However, this coverage does not account for damage to your tools and equipment due to wear and tear.
  • Errors and Omissions (E&O) Insurance: Also known as professional liability insurance, E&O insurance protects your demolition company from allegations of misconduct, negligence, and errors as well as claims of financial loss resulting from your services or failure to deliver a service as agreed.
  • Commercial Property Insurance: Commercial property insurance covers your office, warehouse, or storage compound as well as your business’s contents, furnishings, and inventory if damaged or destroyed by fire, flood, severe weather, vandalism, or theft.
  • Commercial Auto Insurance: Commercial auto insurance is necessary for any vehicle used for business purposes that transports people, materials, packaged goods, and tools and equipment. At a minimum, it provides third-party liability protection if you’re in an accident, accident benefits for you and your passengers, as well as coverage if you’re involved in a hit-and-run collision.
  • Legal Expense Insurance: Hiring and retaining a lawyer is expensive. Legal expense insurance provides funds to do so as well as access to legal advice with an experienced lawyer on a broad range of business-related issues. It also includes coverage for things such as tax protection, employment or contract disputes, debt recovery, and statutory licence protection.

The cost of insurance for demolition contractors costs approximately $2,500 annually for a commercial general liability policy with a $2 million coverage limit. Insurance companies consider several factors when determining a price for your insurance policy, including:

  • Your services and types of projects (commercial or residential or both)
  • Number of employees
  • Years of experience
  • Location
  • The tools and equipment you own
  • Your annual and projected revenue

Regardless of the demolition services you provide (residential or commercial), there may be risks of injuries and property damage, especially at worksites involving heavy machinery and explosives. Should you or your employees be named in a lawsuit, having the proper insurance will provide the financial coverage that your business requires. Our coverage is ideal for:

  • Abatement contractors
  • Asbestos removal professionals
  • Commercial demolition contractors
  • Debris removal contractors
  • Excavation companies and professionals
  • Residential and house demolition contractors

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Common claims scenarios

damaged car

Problem: You were contracted to remove a section of a client’s home. During the demolition, a large piece of debris collapses and damages your client’s vehicle that was sitting in the driveway.

Outcome: Your commercial general liability insurance may pay for the damages to your client’s vehicle.


Problem: Your office is broken into overnight and vandalized. The burglars took the keys to your bulldozer parked in your storage compound and destroyed it by driving it into a nearby lake.

Outcome: Your commercial property insurance may pay for the damages to your office, and your tools and equipment coverage may cover the cost to replace your bulldozer.

water pipe burst

Problem: During the demolition of an older commercial building, one of your subcontractors accidentally struck an underground water pipe. The flooding ended up causing mould problems in nearby buildings. The owners of those buildings sue you for damages.

Outcome: Your commercial general liability insurance may pay to repair the damage to the water pipe, while your pollution liability insurance may cover the cost to clean up the mould in the neighbouring buildings, your legal defence fees, and any compensation awarded to the plaintiffs by the court.

Frequently asked questions

Does my demolition insurance policy include coverage for any subcontractors I hire for a specific project?

No. When hiring subcontractors, it’s recommended you only hire professionals who carry an insurance policy of their own. Your policy may not cover you for errors, accidents, or damages caused by a subcontractor.

If sudden, extreme weather damages my company’s heavy equipment such as a bulldozer at a job site, will my policy cover me for those damages?

Provided you have tools and equipment coverage as part of your overall policy, yes, your bulldozer would be covered for damages resulting from extreme weather.

Does demolition insurance include coverage for noise from explosives used during a demolition?

Yes. Demolition insurance includes commercial general liability coverage, which provides protection from costs associated with third-party bodily injuries including aural injuries caused by the noise created by explosives.

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