Renovation Contractor Insurance

Renovation Contractor Insurance

Whether you’re an independent contractor or small business owner protect your finances and professional reputation from potential liabilities with renovation insurance.

Zensurance - Renovation Contractor

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Renovation Contractor

Insurance for renovation contractors

As a renovation contractor, the work you do to enhance, refresh, and repurpose any room or property increases the value and appeal of any structure or building. However, mistakes and accidents can happen, leading to a potential lawsuit against your business. Even a single, frivolous lawsuit can severely damage your reputation and be financially ruinous.

Whether you’re doing a small renovation job or a complete makeover of a residential or commercial property, renovation contractor insurance is a vital part of any professional contractor’s risk management strategy.

Renovation insurance protects renovation contractors against specific risks, such as third-party bodily injury and property damage. Depending on the types of coverages you choose and how your policy is customized to suit your business, you may wish to include coverage for your tools and equipment, business vehicles, and office or warehouse.

Unexpected events can strike without warning – flood or fire damage to your business property, a severe windstorm that damages a worksite, vandalism or theft, an accident that injures a third party. Without a comprehensive commercial renovation insurance policy, you are exposed to covering any damages or losses out of your pocket. Those losses or damages could cost you hundreds of thousands of dollars and force you into bankruptcy.

As a renovation and home repair contractor, your projects may range from replacing a bathroom sink to renovating an entire kitchen. Before embarking on any project, you must have insurance coverage specifically designed to safeguard you against your risks and protect the equipment you own. A comprehensive renovation contractor insurance policy typically includes the following coverages:

  • Commercial General Liability (CGL) Insurance: Often referred to as ‘slip-and-fall’ insurance, CGL insurance is designed to protect your business from third-party bodily injury or property damage claims. It provides financial support for your legal defence if you are sued, and damages or losses suffered by a third-party such as their medical fees if injured at your commercial property or a worksite.
  • Tools and Equipment Insurance: Without the tools and equipment you use to beautify and transform your customers’ properties, you’ll have difficulty getting hired. Protecting your tools, equipment, and the related gear you need to do renovation work is essential to include in your overall policy. Tools and equipment insurance is designed to reimburse you for repairing or replacing your tools if they are stolen, vandalized, or damaged by fire, flood, or severe weather.
  • Pollution Liability Insurance: Depending on the work you do, the use of toxic substances or exposure to different kinds of pollution because of the project work you are tasked with completing could inflict environmental damage or trigger a physical illness in people exposed to it. Pollution liability insurance covers any third-party bodily injuries or property damage someone suffers and pays for clean-up costs, civil fines, and emergency response expenses.
  • Commercial Property Insurance: You should protect your office or warehouse from the financial fallout of a fire, flood, vandalism, theft, or damage resulting from severe weather. Commercial property insurance provides you with financial support to repair your business property, contents, and inventory after an insured loss.
  • Commercial Auto Insurance: Any vehicle you use for business purposes – transporting people, materials, or meeting clients at a job site – must be covered by a commercial auto policy. Most private-passenger car insurance policies will not pay for a collision or damage claim related to business activities. However, commercial auto insurance provides you with financial support if you are involved in a car accident or if the vehicle is stolen, vandalized, or damaged by severe weather.

The cost of insurance for a renovation contractor working on residential projects typically starts at around $450 per year for a commercial general liability insurance policy with a $2 million limit.

There are several factors insurance companies consider when determining a price for your annual policy, including:

  • The type of services you provide and project type (commercial or residential)
  • The number of employees or subcontractors on your team
  • Years of experience
  • Your business’s location
  • The tools and equipment you own
  • Your annual and projected revenue

Yes. Whether you offer commercial or residential renovation or home repair projects, work-related accidents that cause third-party injuries and property damage can result in liability claims against your business. A customized insurance policy provides you with the financial protection you need if you or your employees are sued for damage or loss.

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Common claims scenarios

Commercial Property Damage

Problem: During the renovation of a commercial office building, one of your subcontractors mishandled heavy equipment, which caused property damage on the ground floor.

Outcome: Your commercial general liability insurance may cover the cost to repair the property damages.

Paint Removal

Problem: After removing paint from the interior of an older home, improper disposal of the paint resulted in lead poisoning to the residents.

Outcome: Your pollution liability insurance may cover the cost of your legal defence fees and any court-ordered settlement resulting from the lawsuit.

Warehouse Fire

Problem: The chemicals in the wood finish you used for your client’s kitchen cabinets emitted pollutants, making them sick.

Outcome: Your pollution liability insurance policy covers the $100,000 lawsuit placed against you for bodily injuries.

Frequently asked questions

Does my commercial auto insurance provide coverage for my tools and equipment while in transit?

No. A commercial auto policy does not cover the cost to repair or replace tools and equipment if they are damaged in a collision or stolen from a business vehicle. To protect those assets, you need to include tools and equipment insurance in your overall policy.

Are renovation contractors required by law to have insurance?

In most provinces, renovation contractors must carry commercial general liability insurance. Your customers may also insist you are insured and ask you to provide them with a certificate of insurance or proof of insurance before hiring you. Check with the authorities in your jurisdiction and speak to a Zensurance licensed broker to ensure you are adequately protected.

Are any subcontractors I hire for a renovation project covered by my commercial general liability insurance policy?

It depends on the terms and exclusions of your policy. It may be necessary to include any subcontractors you hire for a project as an ‘additional insured’ to your policy. Additionally, it is advisable to encourage any subcontractors you hire or work with to get their insurance coverage. A Zensurance licensed broker can help them if they are not insured.

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