contractor CGL

How Much Contractors Insurance Should I Have?

It doesn’t matter how many precautions you take as a contractor there are always going to be accidents. Whether you drop a hammer on a customer or you damage an irreplaceable piece of art, these are the types of risks that you are exposed to as an Ontario contractor. This is why it is imperative to learn about what contractors liability insurance is and then acquire the right insurance policies that your business actually needs to protect itself from risk exposures. Any hired contractors for example, cleaning companies in the Ontario area is exposed to a number of risks day in and day out that need to be covered under a comprehensive cleaning insurance policy. The only problem is that most contractors, especially cleaners, don’t really understand insurance due the coverages being somewhat complicated.

They know it can protect them and that it is required by law, but they don’t really understand the complexities of it. Not only do you need to possess certain types of contractors insurance, but also you need to make sure that you have the right amount of coverage.

different type of ontario contractor professionals

 

First, what exactly is Contractors Insurance?

Before haphazardly investing in insurance policies for contractors you need to understand what policies are available to you and how they can protect you. The first and most important thing that you need to know is that contractor’s general liability or CGL insurance is a specific type of insurance policy that is required by law in Ontario. It will offer financial compensation in the event that you or your employees mistakenly cause property damage while on a job. It will also protect you if the client suffers any bodily harm. It also protects you against scrupulous advertising.

This is something that you probably won’t encounter in the construction field, but there are a lot of sour individuals out there. If you post an ad stating that your services are more effective and efficient than a competitor, it is possible that the competitor can claim that you damaged their reputation. This will most likely result in a long, drawn out lawsuit due to defamation of character. CGL insurance will not only cover the court costs, lawyer’s fees, and deposition fees, but it will cover you in the event that you lose the case.

It is also worth noting that coverage can be extended to cover your tools and automobiles.

coverages offered by contractors insurance policy for the basic 2 million coverage

 

How Much Coverage Should A Contractor Invest In?

Insurance really seems like a hassle to most individuals. You work your whole life to build up a business, but you still have to pay monthly fees to another company to ensure that you are protected against certain situations. Yes, it seems like a hassle, but the right insurance policies can protect your company to a great degree. Not only is choosing the right policies extremely important, but choosing the appropriate amount of coverage is just one of the many reasons why contractors are required to have insurance. The amount of coverage that you need really depends on several factors.

Are you looking to get into the industrial or commercial industrial? Contractors that work on commercial and industrial projects will have to handle much more expensive materials and properties. Ultimately, that will require more coverage. Most individuals who stick to the residential field will not need as much coverage. $2,000,000 will be sufficient coverage for most average Ontario contractors just starting their business.

Another investment worth exploring would be becoming a bonded company. A good reason for this is to have more flexibility in terms of landing jobs. Now let’s say your company is growing and wants to start taking on city jobs or bigger projects. These type of jobs are usually around the $250k to $1 million range. The project owners may require you to present a bid bond or performance bond in addition to insurance proof. This bond offers  financial protection to the party hiring you and also verify your company’s capacity to do the job as the insurance companies that provide you this bond underwrite your business, assets, cash, and previous jobs before backing you with a bond.

minimum coverage should be 2 million dollars in ontario canada for contractors

 

Know Your Other Risks

You already know that there are a variety of risks that you and you employees are exposed to on a daily basis, but completely understanding your risks will help you customize your insurance needs. Investing in the right packages will ensure that you are protected at the right times against the most serious threats.

  • Commercial Auto Insurance – Contractors don’t have the luxury of working in a shop environment. They will be required to travel from location to location. Whether you are hauling heavy materials or giving quotes you will need a commercial vehicle to do so. This vehicle must be covered under auto commercial insurance in the event that you or your employee gets in an accident.
  • Errors And Omissions Insurance – Mistakes are always possible in the construction industry. When you undertake remodeling jobs, you are not only under tremendous amounts of pressure, but you are facing strict deadlines. This means that you have to complete projects within a certain amount of time. This often results in employee mistakes. Errors and omissions insurance can protect you in these exact types of situations. If you or your employee caused financial loses to an employee, this type of policy will cover those losses.

It is pertinent to consider all of your risks. Then, you should obtain the right type and amount of insurance that you need to ensure that all of those risk factors are covered with the help of your broker.

get a quote now

 

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