contractor CGL

What Is Contractors Liability Insurance?

The construction business in Ontario is without a doubt demanding and aggressive. In just a single day, you or your employees could be exposed to a number of risks. Not only could these risks result in a life-threatening injury, but also could result in a major lawsuit. Some lawsuits will not only affect you, but they can affect your family as well. It is probably safe to assume that you are the provider in the household and if you don’t have money coming in how are you going to provide for your family? This is why it is always imperative to make sure that you are covered with the proper insurance polices to the fullest. One such policy that you are going to need is contractors general liability insurance.

 

What Does CGL Insurance Do?

If you are going to go into the contractor field in Ontario, you are going to need contractors general liability insurance, which is sometimes referred to as contractors insurance. This is a specific type of insurance policy that is not only required by the business laws of Ontario, but it can protect you in a variety of likely situations. The policy will cover you in the event that you or your employees cause bodily harm to a third-party or property damage. It can also offer protection in the event that you post an ad that damages the reputation of a competitor, which is probably something you don’t really have to worry about in the contractor’s line of work.

Contractors General Liability Insurance

 

Understand How Contractors Insurance Works

So, contractors insurance covers bodily harm and property damage on a job site. However, this is still kind of vague. In order to truly understand the policy, you need to know exactly how this insurance works and whether or not you need to have professional indemnity insurance as a contractor. Imagine if you are on a job changing out a heating and air unit in the attic. If you or your employees slip and fall through the attic, this policy will pay to have the attic ceiling repaired.

This policy also covers third-party bodily harm. Say you are on that same job and you have an extension cord plugged up to run a drop light into the attic because there is no electricity up there. If the homeowner walks by, trips on the cord and sustains injuries, this policy will kick in and cover the medical expenses.

It also covers damages caused by misleading advertising claims. For instance, if you post an ad saying that you offer better service than a local competitor, you might end up damaging the reputation of that competitor. As a result it is highly likely that the hurt competitor might try to sue you for hurting his or her reputation. This policy will cover the court costs, lawyer fees, and it will even cover some or all of the damages if you lose the case.

protection from lawsuit that are caused by contractor or its employees

 

Understand Where CGL Insurance Is Lacking

While it is impossible for the Ontario contractor to get by without contractors general liability insurance, it doesn’t offer coverage for all the risks that you will be exposed to. However, there will be other coverage policies available that can offer the protection that you need. Whatever the situation is, it is important to know what CGL doesn’t cover, so you can get cover your other risks with a customized insurance package. Even though contractors insurance covers bodily damage for the client, it doesn’t not offer you or your employees bodily damage protection. You will need another policy for this.

Contractors general liability insurance also doesn’t protect you against vehicle accidents. It doesn’t protect your place of business in the event that it is robbed or hit by a tornado. It will however protect you in the event that a customer slips and falls in your place of business. This policy will not cover poor workmanship either.

Let’s say you are a carpenter who is fully covered under a carpenter insurance policy and if a customer doesn’t like the job when it is done or you painted a porch the wrong color, you are going to be left with the charges.

Another point worth noting is that if your construction business decides to bid on jobs that require surety bonds, then you will need to apply for a surety facility with your broker or agent before you will be able to reach the official bidding process. Surety bonds have nothing to do with insurance. These bonds are simply a financial guarantee, NOT insurance.

coverages not included under basic cgl insurance but can be purchased

 

What About Subcontractors?

Let’s say you are an independent contractor in Ontario. There will probably be many cases in which you will be working with subcontractors. For instance, if you are installing a new heating and air unit and later discover that the wire leading to the unit isn’t sufficient for the new amperage, you might have to turn to an electrician to run a new wire. When you bring this individual in to do the job, he or she will be your responsibility and you are going to be liable for what they do. They could just as easily cause property damage or physically injure the customer.

Luckily, your independent contractors insurance policy can have added on coverage that offers protection for that subcontractor as well. That being said, most subcontractors you hire will probably already have their own policies, but just in case you know they will be covered under yours, provided they are endorsed (added on) on your policy.

You should always be weary about working with someone that doesn’t have coverage, because it is required by law in Ontario.

subcontractors are covered under insurance policy only when they are endorsed as an additional coverage

 

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

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