Contractors Insurance, Ontario - Coverage for Trades & Construction
What is Contractors Insurance?
Contractors’ insurance, Ontario, is built to protect contractors, subcontractors, and contracting businesses from the everyday risks of running a trade or construction business. Whether it’s equipment breakdown, property damage, third-party bodily injury, or unintentional damage to someone else’s property, these are the kinds of claims this insurance is built to handle. Most policies are built around commercial general liability (CGL), which includes tools and equipment, commercial auto, and professional liability based on the trade.
Contractor insurance is more than just a policy, protecting against unexpected incidents that help contractors avoid financial losses, legal liabilities, and costly repairs, allowing contractors to focus on their work. Though contractor insurance is not mandatory for every trade, some clients and project owners ask for CGL proof before starting a project, and a certificate of insurance (COI), which can be issued the same day.
GET A QUOTEWhy Choose Affiliated Insurance for Your Contractors’ Insurance?
Over a Century of Experience
Affiliated Insurance has been proudly serving contractors and businesses in Ontario since 1903. We provide reliable, personalized coverage that protects against industry-specific risks, ensuring contractors receive the best protection for their businesses. With over a century of experience, we aim to provide expert guidance, competitive rates, and a simplified insurance process to help contractors secure the right coverage.
Independence and Client-Focused
As a 100% independent insurance brokerage, we work for you, not for insurance companies. If a claim goes wrong, we are your advocates, always making sure you get a fair settlement. As a local, family-owned business, we genuinely care for you. We’re not a call centre that thinks of you as another number. We aim to build long-term relationships with our clients by providing personalized service, expert advice, and reliable insurance solutions.
Personalized Insurance Solutions
We don’t believe in one-size-fits-all insurance solutions. Every contractor in Ontario has different business requirements and faces different risks. We take the time to listen and tailor your insurance policy based on your needs. Since we have access to a wide network of top insurance providers, we make sure to get you the most competitive rates without compromising on coverage. We also understand the stress you face when you file a claim, which is why we ensure a smooth hassle-free process to help you navigate claims efficiently
Always Here for You
We respect your time and know when you contact us, it’s usually important. That’s why we strive to answer every call promptly, ensuring you speak to a real person immediately. Whether you decide to contact us by phone, email, text, or in person, we will ensure that all your concerns are addressed efficiently. We also offer 24/7 access to your policy through our self-service online portal, which keeps you informed of changes such as new discounts, threats and insurance protections.
Do General Contractors Need Insurance Coverage in Ontario?
Yes, general contractors need to carry insurance in Ontario because most clients and project owners require proof of insurance before agreeing to do business with you and let you work on their construction projects. They are usually part of contract requirements. It’s important to know that certifying compliance with WSIB and liability coverage is necessary for accessing many job sites in Ontario.
Besides protecting your business, contractors’ insurance enhances your credibility and shows your clients that you’re reliable and responsible. We understand that building trust is essential to your success, and that’s why we offer comprehensive insurance solutions to meet clients’ requirements while protecting your business. If you need adequate coverage, you’ve come to the right place.
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What Insurance Do Contractors Need in Ontario?
Contractors’ insurance isn’t just a necessity; it’s a legal requirement in some cases in Ontario. While not legally mandated for all contractors, most clients will not work with your business unless you show a certificate of insurance.
Some of the common contractors’ insurance coverages available in Ontario include:
Commercial General Liability Insurance
Commercial general liability insurance in Ontario protects businesses from third-party claims of bodily injury or property damage caused by their business operations. General liability coverage is essential for contractors and businesses because it covers legal fees, medical expenses, and any settlements associated with third-party liability claims. For example, if you’re building a fence and are found at fault for damaging someone’s car, contractor liability insurance will cover the repair costs and any legal expenses associated with the third-party injury.
Workers Compensation Insurance
Workers’ compensation insurance is administered by WSIB in Ontario. It covers medical costs and lost wages if an employee gets hurt on the job. Every contractor with employees must register with WSIB, and many general contractors ask subcontractors to show proof of WSIB clearance before starting work on a site.
Commercial Property Insurance
Owning a shop, a warehouse, or an office is good for your small business, but it comes with several risks that can cost you thousands of dollars. Incidents like fire, theft, vandalism, and natural disasters can cause significant damage to your property, resulting in costly repair, business disruptions. Commercial property insurance in Ontario protects your contracting business by covering repair or replacement costs for property damage claims by insured events.
Tools and Equipment Coverage
Your tools and specialized equipment are an investment that needs protection. A sudden equipment breakdown or stolen tools can disrupt your operations, leading to missed deadlines, which can cost you money and clients. Tools and equipment insurance helps you repair or replace your tools and equipment quickly, ensuring your projects stay on track. If you lease or rent any tools or equipment, an installation floater can extend this coverage to protect them whether they’re with you, in storage, or at a client’s location.
Builder’s Risk Insurance
This insurance policy, also known as construction liability insurance, protects construction work from several risks, including fire, theft, lightning, and other natural disasters. It pays for repair or replacement costs for damaged materials, structures, and equipment, ensuring that unexpected incidents don’t cause major financial losses. Clients or project owners mostly carry this insurance coverage, but sometimes contractors are the ones required to carry it. It’s recommended to confirm with your client to determine who is responsible for obtaining this insurance policy.
Commercial Auto Insurance
If your contracting business uses any vehicles such as cars, vans, or trucks for transporting materials, you’re required by law to carry commercial auto insurance in Ontario for all the vehicles you have. This insurance policy protects your vehicles and drivers from accidents, liability claims, property damage, and medical expenses that result from collisions. It ensures that your business complies with the law in Ontario while remaining financially protected against unexpected events on the road. If you own more than one vehicle, we recommend getting fleet insurance in Ontario instead of commercial auto coverage to insure all your vehicles under one policy to simplify the process and reduce costs.
Professional Liability Insurance for Contractors
Mistakes happen all the time, but a single error can cost you thousands of dollars in legal fees and lost business while also putting your reputation in jeopardy. Professional liability insurance in Ontario protects your contracting business from claims of professional errors and mistakes that result in financial loss, project delays, or legal action. This coverage, also known as errors and omissions insurance, pays for legal fees and settlements arising from claims of professional mistakes or failure to meet contractual obligations.
Business Interruption Insurance
If your business operations are interrupted due to a covered event, this type of contractors’ insurance helps compensate for lost income and supports you in resuming operations when you’re ready. For example, if your storage is robbed and you lose essential tools and equipment, this contractor insurance policy will support you in many ways. By covering lost income and ongoing expenses while you recover, this insurance reduces the financial strain on your business until you’re back on your feet.
Pollution Liability Insurance
Environmental Pollution Liability insurance covers claims involving environmental contamination due to business operations.
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GET A QUOTEWho Needs Contractor Insurance in Ontario?
All contractors in Ontario need a contractor insurance package. Whether you’re an independent contractor, subcontractor, or general contractor, having the right contractors’ insurance covers common risks that can lead to major financial losses.
Below are some professions that should have contractors’ insurance:
- Construction Contractors: Construction insurance protects against property damage, construction site accidents, liability claims, and other risks associated with the construction industry.
- Subcontractors: to provide coverage for worksite injuries, equipment breakdowns, and liability claims.
- Electricians: to protect against faulty wiring claims, fires, and damages to your client’s property. Electricians’ insurance costs range from $625 to $950 annually.
- Plumbers: to protect from water damage claims, installation errors, and other liability claims. Plumbers’ insurance in Ontario typically starts around $500 to $750 per year.
- HVAC Installers: to provide coverage for equipment breakdown, installation errors, and property damage.
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Roof and Tile Builders: to protect from the risks associated with their outdoor work involving heights, heavy machinery, and potential damage to the business premises.
- Painters: to cover claims of third-party property damage, material spills, third-party bodily injury, and other risks associated with their work.
Ensure your contracting business stays protected with the best business insurance; call us today!
GET A QUOTEGeneral Contractors vs. Sub-Trades: Coverage Differences
GCs and sub-trades coverages vary due to carrying different levels of risk and project responsibilities.
What Coverage Does a General Contractor Need?
- CGL (higher limit): CGL is a standard liability insurance that every contractor needs. It aims to cover the whole project rather than just a specific sub-trade.
- Commercial property: Covers the GC’s own property, shop, or office
- Commercial auto: covers vehicles the GC uses for work
- Course of construction: covers the actual project while it’s being built, in case of fire, theft, or damage before it’s finished
- Umbrella/excess liability: Needed for bigger projects that carry higher risk. It is added on top of CGL.
- Proof of insurance to project owners/muncipilaties: It’s a requirement, not an insurance type. GCs need to show the previous proofs to be able to start a project.
What Coverage Does a Sub-Trade Need?
- CGL (lower limits): It covers a smaller amount than the standard CGL coverage, since it includes only one trade within the whole project.
- Tools & equipment: Covers the sub-trade’s own tools, in case of theft or damage
- Commercial auto: Covers any vehicles the sub-trade uses for work
- Named on GC’s COI, or carry their own: There are two ways for sub-trade coverage: either the GC adds them to the GC’s certificate of insurance, or the sub-trade carries their own separate policy
It’s worth noting that GC’s insurance doesn’t cover sub-trade by default. Sub-trades must have their own separate insurance policy.
Some commercial and government projects use an Owner-Controlled Insurance Program (OCIP) where the owner manages to set one insurance policy for both general contractors and sub-trades working on the project. If you’re invited to bid on an OCIP project, make sure to know if the project owner requires you to have your own separate coverage.
Builder’s Risk Policy: An Essential Insurance Coverage
Builder’s risk insurance is essential for contractors because it protects them from claims of damage to the construction site, materials, and equipment during the building process. These damages aren’t usually covered by other insurance policies, making this coverage crucial to protect against potential financial setbacks. It helps cover repair or replacement costs resulting from damage caused by an insured event, such as fire, theft, or vandalism. Moreover, many project owners require this coverage before approving contracts or loans.
Which Insurance Is Best for Contractors in Ontario?
Contractor liability insurance and risk builder’s insurance are the best insurance for contractors in Ontario. However, insurance requirements differ from one contractor to another because they depend on the specific risks contractors face in their daily jobs. With that in mind, it’s important to know that there are many essential insurance policies for any contractor. These policies include contractor liability insurance, risk builder’s insurance, tools and equipment insurance, and commercial auto insurance. These insurance policies ensure you’re never left financially vulnerable and that you’re always protected from unexpected risks.
Don’t leave your business unprotected—Get the best insurance for contractors today!
How Much Does Contractors’ Insurance Cost in Ontario?
Here’s the cost breakdown of contractor insurance:
- CGL ($2M per occurrence): $450 – $1,500/year. Most common requirement; base of any contractor policy
- Tools & Equipment (up to $25K): $300 – $800/year. Higher for specialty or high-value tools
- Commercial Auto (1 vehicle): $1,500 – $3,500/year. Required by law; cost varies by vehicle type and use
- Builder’s Risk / Course of Construction: $500 – $3,000/project. Project-based; often set as a percentage of construction value
- Professional Liability (E&O): $800 – $2,000/year. For design-build and specification contractors
- Full Package (CGL + Tools + Auto): $2,500 – $6,500/year. Typical all-in range for a small Ontario contractor
Although choosing more coverage can be costly, it’s essential to protect against unforeseen events that can leave you financially strained and disrupt your operations. At Affiliated Insurance, we make sure you get adequate contractors’ insurance coverage for your business at a competitive rate.
Contact us today to get cheap insurance quotes for your contracting business!
GET A QUOTEComprehensive Protection for Ontario Businesses
At Affiliated Insurance, we offer customized business insurance in Ontario designed to protect businesses across Ontario. Our business solutions include:
What Factors Affect Your Contractors’ Insurance Premiums?
Insurance companies consider several factors when calculating your insurance premiums, including:
- Type of Work: High-risk industries such as roofing and demolition get higher premiums due to the increased chances of accidents and liability claims.
- Policy Limits: Higher coverage limits provide enhanced protection for your contracting business, but it also means that you’ll be paying more for your insurance.
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Business Size: Larger businesses with more employees and high annual revenue usually get higher insurance rates.
- Claims History: A history of frequent claims won’t look good to insurers and they may place your business as high-risk, leading to higher insurance premiums.
- Location: Working in high-risk areas can increase your premiums due to the possible risks of equipment and tool theft, property damage, and job site accidents.
How to Get Cheaper Contractors’ Insurance in Ontario?
Contractors’ insurance is essential to protect your assets and reputation, and we understand how crucial it is to keep costs manageable while getting the comprehensive coverage you need. Follow these tips from our experts at Affiliated Insurance to lower your rates without compromising on coverage:
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Compare Quotes: Shopping around and comparing quotes from different insurers is an effective way to get lower insurance rates.
- Partner with an Insurance Broker: Partnering with an independent insurance brokerage like Affiliated Insurance can help you secure the best insurance rates with the top insurance providers.
- Keep a Clean Claim Record: Avoiding frequent claims can help you get lower rates. By following risk management protocols, you can reduce the likelihood of incidents that lead to claims.
- Bundle Insurance Policies: By combining insurance policies into one bundle, you can lower insurance costs, simplify your coverage, and ensure comprehensive protection.
- Pay Annually: Paying annually instead of monthly helps lower insurance costs because many insurers offer discounts if you pay your premium upfront annually.
- Increase Deductibles: If you choose to pay higher deductibles, it can lower your insurance premiums. However, make sure you can pay this amount out-of-pocket in case of accidents.
Reach out to our brokers now and get the best deals for contractor’s insurance in Ontario!
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Our contractors insurance solutions are designed to support the diverse needs of trades and businesses across Ontario. No matter your specialty, we provide reliable protection that keeps your projects moving forward with confidence.
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Contractors Insurance in Ontario – FAQs
Contractor general liability insurance protects contractors from financial losses caused by liability claims of third-party property damage, bodily injury, and other liability claims. Liability insurance is essential for covering legal fees, medical expenses, and other costs associated with liability claims.
You can ask the contractor to show you a Certificate of Insurance (COI) which includes their policy details and their insurance provider information. A reputable contractor should also provide their license details before starting any work.
A contractor’s insurance policy typically includes coverage for the primary contractor, but it does not automatically cover subcontractors. To avoid being held liable for subcontractors’ mistakes, you can either extend your insurance to cover them or ask your subcontractors to carry their own insurance.
Yes, builder’s risk is an essential insurance policy in Ontario because it protects buildings under construction from damage caused by fire, theft, vandalism, and weather-related events. This coverage ensures that contractors, property owners, and developers don’t face significant financial losses if unexpected incidents occur during the construction process.
On average, contractors in Ontario pay $850 annually for a $2 million general liability insurance policy. However, costs can vary depending on factors such as industry type, business size, coverage options and limits, and insurance claims history.
No, contractor insurance is not mandatory in Ontario. However, commercial auto is required by law if you drive a work vehicle, and WSIB is required if you have employees. Also, many clients often ask for CFL even if it’s not required by law.
A certificate of insurance (COI) is a document that proves the contractor’s policy is active. It includes coverage type and amount limits. Many clients ask for it before starting the project. It can be issued on the same day if the policy is active.
Handyman insurance doesn’t differ from contractor insurance. It includes the same core coverage options, like CGL and tools and equipment. The coverage amount can be the only difference, as the handyman’s work tends to carry lower risk exposure and lower project values than larger construction jobs. It’s still worth having, since small jobs can lead to certain damage or injuries.
It is not legally mandatory for all trades. However, commercial auto insurance is required if you operate any vehicles, and WSIB is mandatory if you have employees.
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