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A Complete Guide to Contractor’s Insurance

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Expert Insights from Your Trusted Insurance Broker in Ontario

Are you a business owner, or working as an independent contractor or freelancer in Ontario? No matter which industry you are part of and what your job responsibilities are, there are plenty of risks associated with any type of trade, profession, or business. For example,

  • There could be damage to your business property due to floods, fires, or break-ins.
  • You or your team members may injure yourselves due to slips or falls on the job.
  • There could be accidental damage to your customer’s property while delivering a service.
  • There may be lawsuits filed against you or your business by unhappy customers or vendors.

There are innumerable potential risks that could damage your professional credibility or ability to manage the business. In all such scenarios, having a contractor’s insurance is your way out from financial or professional difficulties. The experienced and trusted Ontario insurance brokers at Orr & Associates offer a complete overview of contractor insurance and its many advantages.

What Is Contractor’s Insurance?

Also called business liability insurance or a commercial general liability (CGL) insurance, contractor’s insurance is a powerful tool that can give peace of mind to small businesses, entrepreneurs, gig economy workers, as well as traditional contractors (such as plumbers, electricians, roofers, lawn care professionals, and so on). A contractor’s insurance can protect your business or service against a wide range of losses. This includes damage or losses related to:

  • Your own property
  • Your customers’ property while you or your team are at their site
  • Your tools, equipment, and other business assets
  • Lawsuits against your business or services.

How Can Insurance Brokers Help with Contractor’s Insurance?

A comprehensive contractor’s insurance is key to creating a robust risk management strategy that can protect you and your business. The coverage needs to withstand multiple projects, various general business liability risks, and the potential risks related to managing your employees, sub-contractors, and customers.

Working with trusted and experienced insurance brokers in Ontario will help toward:

  • Getting adequate insurance coverage that takes into consideration the unique risks associated with your business or profession.
  • Ensuring all possible inclusions that minimize vulnerabilities and cover most potential risks.
  • Competitive prices and best policy matches, carefully selected from a vast array of insurance providers.

How Much Does General Liability Insurance Cost?

When insurance brokers or insurance companies in Ontario determine your premium, they take into account the specific needs and nature of your business or service. This includes factors, such as:

  • Age of the Business: According to the statistics published by Innovation, Science & Economic Development Canada, roughly 30% of businesses do not survive beyond five years. Hence, insurance companies tend to charge higher premiums for inexperienced or newer businesses. However, if you own a start-up, insurers will also take into account your individual work history, experience, employment, experience, and training instead of charging you top dollar premiums solely on the age of your company.
  • Past Claims: For those who have a history of filing claims, chances are your contractor’s insurance premium may be higher than a business or professional with a clean claims record. However, the insurer will consider the nature of the past claims and not go by the number alone.
  • Location: Where you work or provide your goods or services will also play a role in determining your insurance cost. For example, a city-operated business may have higher risks associated with theft or vandalism than a business located in a remote or rural area.
  • Type of Industry and Company Size: Some of the factors that insurance companies factor in include the nature of your work and industry, the number of people you employ, your business property and assets, and the types of tools or equipment you use. For example, if you need to store and maintain expensive construction equipment, you are likely to pay a higher premium than a business that relies on just computers and phones.

Who Needs Contractor’s Insurance?

No matter what the nature of your business or the goods or services you provide, if you are a small business owner, an entrepreneur, or a contractor in Ontario, you need contractor’s insurance. You will likely benefit from it just as much as your clients or customers. Essentially, any business or independent contractor needs contractor’s insurance for protection against financial loss, job loss, or loss of goodwill and credibility, and litigation.

What Does Contractor’s Insurance Cover?

Each business is different and your insurance requirements may vary vastly. However, the typical contractor’s insurance policy comprises a business liability or CGL Insurance, which is applicable to all contracting trades. This protects you and your business from a number of vulnerabilities, and covers:

  • Lawsuits and Claims: Legal fees and costs involved in defending your business in a litigious society where lawsuits are commonplace.

Here are the other policies that are either included or you can add-on to your contractor’s insurance:

  • Buildings, Property, and Equipment: Covers any damage (caused by floods, fires, theft, etc.) to your buildings, including the warehouses, storefronts, or corporate offices.
  • Tools and Equipment: Covers the repair or replacement of the tools or assets (that your trade or job delivery depends on) in the event of any loss, damage, or theft.
  • Customers’ Property: Covers accidental damage to your customer’s property while you are at the job site or the property is in your care, custody, or control.

Do Contractors Need Cyber Insurance?

Whether big or small, no business is safe from data theft or breaches, hence, it may be a good idea to safeguard your business against related losses. Often, smaller businesses perceive themselves as less likely targets and are unprepared for such events, which can create sudden and unexpected dips in business revenues, your professional credibility, as well as customer loyalty. Cover your business from losses that occur due to computer frauds or cyberattacks. As most general liability insurance policies do not cover these losses, consider purchasing cyber insurance as a separate policy, over and above the contractor’s insurance policy.

Insurance Considerations for Independent Contractors

As an independent contractor, you may face many unique risks in your professional endeavours. Without a robust contractor’s insurance policy, you may have to dig deep into your pockets for many potentially risky scenarios or take on unnecessary debt to pay for legal fees, damages, and other expenses that affect the smooth running of your business.

If you work at multiple sites or move from site to site, consider a liability insurance policy that covers:

  • Any third-party injuries during a project
  • Property damage resulting from your, or your team’s actions
  • Repairs or replacement of equipment or tools that may be lost, stolen, or damaged

If you work in an advisory capacity, consider getting professional liability insurance that covers your legal expenses for lawsuits that claim negligence or failure to deliver the promised service.

Having comprehensive liability insurance gives your potential clients the assurance that they are not liable for any on-site accidents, mishaps, or damage to people or property when they hire your services. Contractor’s insurance is also key in securing new assignments and contracts and growing your venture or services successfully.

Frequently Asked Questions about Contractor’s Insurance

Is Contractor’s Insurance Necessary for Contractors and Subcontractors before Signing Project Contracts?

In Ontario, it is very important for any independent contractor to have a contractor’s general liability insurance policy. A well-designed contractor’s insurance policy will protect you from the financial burden of lawsuits or claims arising from property damage or bodily injury that may occur at your job site. They also help cover the settlement costs that may arise during or after the completion of your projects.

Do Contractors need Professional Liability Coverage in their Insurance Policy?

Most contractors who carry out skilled trades may not need a professional liability insurance policy. However, if you offer any advisory or consulting services as part of your business, then consider adding them to your contractor’s insurance policy to get financial protection against claims that allege negligence, miscommunication, or failure to deliver a promised service.

Are Subcontractors Covered by the Contractor’s Liability Insurance?

If subcontractor coverage is endorsed on your contractor’s insurance policy, it will cover those professionals in the exact same manner as it covers you and your employees.

Get the Best Contractor’s Insurance Policy with Our Insurance Brokers in Ontario

At Orr & Associates, we have the experience and expertise to get you the best coverage and benefits that contractor’s insurance policies can offer. As Ontario’s leading insurance brokers, we offer a wide array of insurance products under one roof and have partnered with the top insurance companies in each space. Our expert consultants can guide you on the policies that best meet your requirements and provide an easy comparison of plans and prices to help you make informed and cost-effective decisions.

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Our contractor’s insurance includes general liability insurance, tools, and equipment, as well as building protection. We can serve your contractor insurance requirements through multiple locations across Ontario. This includes Bradford contractor’s insurance, East Gwillimbury contractor’s insurance, King contractor’s insurance, Nobleton contractor’s insurance, Schomberg contractor’s insurance, Aurora contractor’s insurance, and Newmarket contractor’s insurance.

For more information on our products and services, call us toll-free at 1 (866) 521 5926. You can also get in touch with us online to request a free quote for contractor’s insurance.