Do I Need Contractors Insurance?

The insurance industry in Ontario is without a doubt extremely confusing. There are a variety of policies available, there are tons of providers to shop with, and on top of this everyone charges a different rate. Most individuals make the assumption that it is best to go with the company that offers the lowest rates or get the lowest amount of coverage possible just to lighten their monthly payment. Unfortunately, this is not the right approach.

Most new contractors for example, plumbers, don’t really even know what types of plumbing insurance coverages they do and do not need. This is why it is imperative to do your research before getting into business because insurance is something that could potentially save your company.


What Exactly Is Contractors Insurance?

When doing your research you will probably heard the term contractors insurance or contractor general liability insurance over and over again. However, you still might not really understand what it is. To simply put it, this is a specialized type of policy that can protect you in a variety of situations. This policy protects you in the event that you or one of your employees damages a piece of property while working a job. It will also protect you if you or one of your employees causes physical damage to a client.

insurance for contractors to protect them in lawsuit and expenses


Does The Law Require One To Purchase CGL?

There is also a lot of confusion whether contractors need contractors insurance or not. Well, the reason that there is so much confusion is because every province is different. However, in the Ontario area it is absolutely mandatory to acquire this policy before going into business. Any contractor operating without the insurance is doing so illegally. That being said, it really is a good thing that this insurance is required because it really can cover you in a variety of risky situations. And, as a contractor you are going to be exposed to many of them so it would be in your best interest to learn about how much contractors insurance your business should have.

ontario contractors required to have a minimum of 1 million cgl coverage


What Does Contractors Insurance Offer Me?

Above you learned that contractors insurance offers compensation in the event that you or your employees cause property damage or bodily harm. Basically, what this means is if you are working on a job and you damage a piece of property, the policy will pay to repair those damages. If you drop a tool and hit a customer or a customer trips on your tools and gets hurt, the policy will also pay for the medical expenses that you face. However, just policy just doesn’t stop protecting you there.

Probably the best thing about contractors general liability insurance is that it will protect you in the event that the case gets taken to court. It will pay for any court fees, lawyer fees, and deposition fees. There are some cases when it will even cover some of the settlement if you are deemed at fault.

protection for business, employees, tools, vehicles, and third party liability


Acquire The Right Amount Of Coverage

So, by now you know that CGL insurance is an absolute must for Ontario contractors. That being said, getting the right amount of coverage is also extremely important. Most contractors will try to opt for the lowest amount of coverage hoping to lower their cost of contractors insurance. Sure, it will cut your monthly costs, but this is really not the right approach. The amount of coverage basically determines how much the insurance is going to pay out. For instance, if you only have $10,000 worth of coverage it means that your insurance will only pay $10,000 maximum on a claim.

Sure, this might be enough for most property damage claims, but it will be nowhere near enough for a lawsuit or a major medical injury. Most experts in the field recommend going with at least a $1,000,000 policy. However, let’s say you a landscaping company that is going to be undertaking major industrial or commercial jobs, you might even want to go higher for $2,000,000 to $5,000,000 worth of landscaping insurance.


Bonded jobs

Also worth noting is that sometimes project owners, big builders, governing bodies, municipalities, or your city may ask you to present a surety bond in order to bid on tendering jobs in addition to insurance. If this is the case, it would definitely be worth exploring applying for a bonding facility so your business can bid on jobs that are exclusive to bonded companies.

Type of contract surety bonds we provide for contractors

We can help you attain these bonds. Please contact us to learn more.


Is Getting Contractors General Liability Insurance Hard?

Insurance might be confusing and somewhat expensive, but at least acquiring the policy is extremely easy. There are a variety of insurance providers in the Ontario area standing by right now ready to assist you. You can easily pick up the phone book, open the yellow pages, and call any number of them to get a quote. You can also go online and perform a simple search to reveal a list of providers in the area. In fact, you can even get a quote online in a matter of fifteen minutes or less. All you have to do is enter your business information and the company will e-mail you a quote.

You will be required to enter some information and having this information on hand ahead of time will make the process easier and faster. You will probably be required to provide your business name, address, yearly earnings, your name, number of years in business, when your business opened, and number of employees. Either way, getting CGL insurance couldn’t be easier!


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Builder’s Risk Insurance

We also provide Builder’s Risk Insurance for contractors and builders. This insurance provides financial protection to property owners, subcontractors, and general contractors during the construction of the project.


Other frequently asked questions before buying contractors insurance


Type of contractors we commonly insure