What Does a Contractors Insurance Policy Cover in Ontario?

Are you thinking about becoming a contractor in the Ontario area? Well, that is completely understandable, as the area is booming with ample new construction and remodeling opportunities. In fact, you have probably seen a lot of vans and trucks riding around with advertisements. You have probably also noticed that those vehicles say licensed, insured, and bonded, but what does this really mean? If you are going to become a contractor in the Ontario area, you will need to familiarize yourself with general contractor’s liability insurance. You will need to know exactly what it covers, what it doesn’t cover, and how you can go about acquiring a policy, because this is going to be a legal requirement.

cgl coverage for bodily injury, damages, third party losses, and more


What Exactly Does CGL Insurance Do?

Contractors general liability insurance, also known as contractors insurance in Ontario, Canada is a specific type of policy that is required by the law for any contractor operating in Ontario. You cannot legally operate without it, but why would you want to because it will protect you in a variety of situations? This specific type of policy will protect you in the event that mistakes are made on the job that lead to bodily harm or property damage. Saying that, always discuss all your risk exposures with your broker to know the amount of contractors insurance your business should have to be fully protected.


Know Exactly What CGL Insurance Coverscontractor looking at project for risk exposures

You just learned that contractors general liability insurance would protect you and your employees in the event that a mistake is made on the job that leads to bodily harm or property damage. However, it is imperative to really understand exactly what that means and how the policy protects you. The first thing that you need to know is that this policy does not protect you or your employees from injuries that occur. You will need another policy for that type of damage. However, contractors insurance will cover any bodily harm that is done to a customer or client. For instance, say that you are changing out ceiling fan and accidentally drop a screwdriver on the homeowner’s head. While the injuries will probably be minor, it is still your responsibility to cover the homeowner’s health care expenses.

Contractors general liability insurance will cover these expenses and so much more. It also covers any property damage that occurs during work hours. Take the same scenario and say that the screwdriver cracked a window instead. Well, CGL insurance will pay the costs to have that window repaired or replaced.


Know Exactly What CGL Insurance Doesn’t Cover

As mentioned above, contractors general liability insurance does not cover bodily damage that occurs to you or your employees. You will need workers compensation for that type of damage. That being said, there are also a variety of things that this policy will not cover on the job. Contractors insurance will not cover your work. For instance, if you install a new deck and the homeowner doesn’t like it because it is the wrong color, this policy will not pay to replace it. If the homeowner will not pay when the job is done, this policy will not compensate you for any losses that you may incur. If you or your employees use the wrong type of glue on a new linoleum floor and it ruins the floor, this policy will not cover the cost to replace the floor.


What about Bonding and Bidding on Jobs?

Now if you are looking to bid on a tender job for let’s say your city, then you need to make sure that your agent or broker has your bid bond prepared well ahead of time. Tender closing timings are firm! If you do not submit your bid documents in time & prepared up to the tender standards, then too bad. There are no second tries. The job is closed.


How To Get Quotes For Contractors Insurance

Thankfully, getting quotes for CGL insurance is incredibly easy these days, especially in the Ontario area. There are a number of providers available and you can get a quote in just a matter of minutes for professionals that are low risk such as painters. So as painting company, you would be able to get painting insurance quotes pretty much in under an hour with most providers that have program rates.

However, if you really want to do this conveniently all you need to do is hit the Internet and perform an online search of insurance providers in Ontario. Any reputable provider will have a website that will allow you to input your information and return you with a quote. You also have the option of calling and getting the general contractors insurance cost over the phone, if you prefer the old school method.

Whatever the situation is, just make sure that you are looking for insurance companies that specifically work with contractors. Not only will you get better quotes, but also you will get a more customizable insurance package, since you are going to need other policies.


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Consider Higher Deductibles

Most contractors are always looking for ways to keep their CGL insurance premiums at a minimum. One way they do this is with quote comparisons, but sometimes this is just not enough to make a difference. While it is risky to choose a higher deductible, it is a great way to keep your insurance premiums to a minimum.

Before you actually choose a high deductible, it is crucial to know exactly what it entails. A deductible is the amount paid out-of-pocket prior to the insurance kicking in. For example, if you have a $1,000 deductible, you will be required to pay that amount before the insurance will even consider paying the claim. 

So in most cases, the higher the deductible, the lower the premium.


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