uw logo

welder at work

Contractor Insurance

As a contractor or handyman, ensuring the success and security of your business goes beyond delivering quality work. It involves protecting yourself against potential risks and liabilities that may arise during your operations. This is where contractor insurance comes into play, providing you with financial protection and peace of mind in the face of unforeseen incidents.
Get quote now..

Contractors Insurance

Contractor insurance is a specialized form of insurance designed to safeguard contractors, handymen, and their businesses from various risks associated with their work. It typically includes several types of coverage, with liability insurance being one of the most crucial.

Liability insurance for contractors provides financial protection against claims arising from property damage or bodily injury caused to third parties as a result of the contractor's work. This insurance coverage is essential because accidents can happen despite your best efforts to maintain a safe working environment. Having liability insurance ensures that you can address any claims or lawsuits that may arise, covering legal fees, settlements, or judgments.

Handyman public liability insurance serves a similar purpose as liability insurance for contractors but is specifically tailored to meet the needs of handymen. It protects you from claims related to property damage or bodily injury caused by your work, including accidental damage to clients' property or injury to third parties. Whether you are fixing a leaky faucet or installing electrical fixtures, this coverage is vital to safeguard your business and reputation.

As an independent contractor, it is always advisable to get a Contractor Insurance coverage Package Program from the same place as you could get a policy with a combination of

  • contractors' general liability,
  • tools and equipment and
  • Property Insurance, all in one package.

Doing so helps reduce the hassle of dealing with multiple companies, complications with claims, and protecting your skilled trades.

Who needs contractors insurance?

Most general contractors and subcontractors in the construction business must carry contractors' general liability policy by-laws and businesses they work for. In addition, if your skilled trades is professional and is regulated by a governing body, you will also need a professional liability policy. Businesses types such as the following will need protection:
  • Construction
  • Carpenter, Plumbing, Electrician
  • Cleaning
  • Landscaping
  • Painting
  • Handyman
  • Snow Plow
  • And many more.

Material Misrepresentation 

Incidents and Claims Despite taking precautions, incidents can occur during your contracting or handyman work. These incidents may result in damage to property, injury to individuals, or both. It is crucial to promptly report any incidents to your insurance provider to ensure a smooth claims process. Insurance adjusters will assess the situation and help determine coverage eligibility.

Material Misrepresentation 

Material misrepresentation refers to the act of providing false or inaccurate information during the insurance application process. This can have severe consequences, as it may lead to the denial of a claim or even policy cancellation. It is essential to provide honest and accurate information when applying for contractor insurance to avoid potential issues down the line.

Subcontractors Not Insured 

Contractors often work with subcontractors to complete projects efficiently. However, if a subcontractor does not have proper insurance coverage, it can expose your business to significant risks. It is crucial to ensure that all subcontractors have their insurance policies in place before commencing work, as their actions may impact your liability and potential claims.

Is there Any Common Cases Resulting in Declined Claim Payments For Contractors?

While contractor insurance is designed to protect you, certain situations can lead to declined claim payments. Understanding these common cases can help you avoid potential pitfalls and ensure that you meet all the necessary requirements. Some scenarios that could result in declined claims include incomplete documentation, policy exclusions, work performed outside of the coverage period, and intentional acts of negligence.

What does it mean if a subcontractor is licensed?

In a regulated professional such as HVAC, Plumbing, Electrician, if the subcontractor is licensed, it means that they have a legitimate claim to be a professional in their industry. Having a license also shows that the subcontractor is serious about each job they do. They won't cut corners when it comes to their work on your construction project.

What happens if I hire an unlicensed trade worker?

It is illegal for an unlicensed person to perform contracting work on any project if the work is regulated by law. If an unlicensed trade tries to sue someone who hired them for unpaid work, no court will enforce payment! On the other hand, any damage caused by the unlicensed worker to a third party may be liable to you or your insurance. This will result in an increase in your contractor policy premium or an outright decline on your insurance renewal the following year. It happens to every unlicensed worker in Canada.

How to protect yourself when hiring a Subcontractor?

Some other best practices to keep in mind as you finalize a written agreement:
Ensure the subcontractor or yourself obtains a permit if the job requires one.
Ask for a copy of the subcontractor's license and proof of insurance.
Pay by check and get a receipt.
Document any changes to the contract in writing.
Keep a file for all related paperwork.

This could work when you hire a skilled worker in Canada.

Business Insurance Policy for Handymen and Contractors

Contractor insurance, including liability insurance for contractors and handyman public liability insurance, is a vital aspect of running a successful contracting business. It offers financial protection and peace of mind, shielding you from potential risks and liabilities that may arise during your operations.

What is contractor insurance and why is it important? 

Contractor insurance is a specialized form of insurance that provides financial protection for contractors and handymen against risks associated with their work. It includes liability coverage, which is crucial for addressing claims related to property damage or bodily injury caused during operations. Having contractor insurance is essential for safeguarding your business and ensuring peace of mind.

What is liability insurance for contractors? 

Liability insurance for contractors is a specific type of coverage that protects contractors from claims arising from property damage or bodily injury caused to third parties as a result of their work. It covers legal fees, settlements, or judgments associated with these claims. Liability insurance is vital for contractors as accidents can happen despite precautions, and it provides financial security in such situations.

What is handyman public liability insurance? 

Handyman public liability insurance is a specialized form of insurance designed for handymen. It offers protection against claims related to property damage or bodily injury caused by their work. This coverage ensures that handymen can address any claims or lawsuits that may arise, protecting their businesses and reputation.

What should contractors do in the event of an incident? 

In the event of an incident, contractors should promptly report it to their insurance provider. It is crucial to provide all the necessary details and documentation related to the incident. Insurance adjusters will assess the situation and guide you through the claims process, helping determine coverage eligibility.

What is material misrepresentation in contractor insurance?

Material misrepresentation refers to providing false or inaccurate information during the insurance application process. It is important to provide honest and accurate details when applying for contractor insurance to avoid potential issues, such as claim denial or policy cancellation.

What are the risks of subcontractors not having insurance? 

When subcontractors do not have proper insurance coverage, it poses risks to contractors. If an incident occurs involving the subcontractor's work, the contractor's liability may be impacted. It is crucial for contractors to ensure that all subcontractors have their insurance policies in place before commencing work to mitigate these risks.

What are common cases that could result in a declined claim payment? 

There are several common cases that could lead to declined claim payments, such as incomplete documentation, policy exclusions, work performed outside of the coverage period, and intentional acts of negligence. Contractors should be aware of these scenarios to avoid potential claim payment issues.

What kind of contractors insurance should a trades have?

Depending on the line of business and the nature of trades, a trades business should consider the following.
Commercial General Liability Most contractors should have a general liability policy or CGL designed for their work field.
Professional Liability Professionals within their skilled trades, such as CPAs and consultants, should carry professional liability, commonly known as errors and omissions coverage.
Health benefit and Life: If you employed a trades worker in Canada, it is mandatory to carry workers' compensation or get an additional private health policy. However, additional benefits, group and life insurance can promote employee loyalty and wellbeing.

What does a contractor's insurance cover?

The common Contractors Insurance policy is usually designed to protect the insured in two main categories.
Liability - Any negligence resulting in other people's injury or suffered financial loss. In other words, the 3rd party coverage.
Own Property - The first-party policy holder's coverage, such as damage in the insured tools, investment, or any material.

To further clarify, a Contractors General Liability protects contractors financially from loss when they become obligated to:

- Pay due to damages or medical payments because someone suffered from bodily injury, property damage, or personal/advertising injury to third parties and when it occurs during the policy period caused by or relating to the contractor's negligence. (You can read more on Commercial General Liability here).
Property policy covers financial loss due to loss of use, business interruption, tools, or building.

How do independent trades get contractors insurance coverage?

If you run a business that produces income through a service contract and has no employees, you're considered self-employed trades. You can buy private health coverage, Commercial General, Professional Liability, and property insurance through this website by clicking "get a quote below." You're not considered an employer only because you hire independent contractors to do some work or if you're trying to hire a trade worker in Canada.

What is the Contractors' Proof Of Insurance?

Before being offered a contract, most contractors will be asked for a "proof of insurance certificate" as a standard business practice. The trades business can ask their broker for this certificate. It will have the name, policy number, address, nature of the business, beginning and expiry date, insurer's information, and address. The company requesting the certificate may also include their name as additional insured on the policy in most circumstances from the trades.

How much does a 1 million dollar business liability policy cost?

The cost of Commercial General Liability solely depends on the line of business. Assume you are welding in the military or oil and gas site then, the premium will be high compared with a janitorial working for a commercial office. Another factor that impacts the premium will be the annual revenue, industry, number of employees, and claims ratio from industry peers doing similar jobs. We have seen that the owner's credit score may also impact the premium. Based on our experience, the standard general liability policy for a low-exposure job is surprisingly affordable. Most policies cost less than 1,000 per year. A million policy costs 0 to 1,000 per year. At the same time, a million more worth of coverage will cost an average of 100. Again, these are for references only and subject to many variables, and it goes on a case-by-case basis. Please click below for a more accurate quote.

How Do I Handle Damage Caused by a Subcontractor or another handyman?

Start with your insurance company. First, call your broker and explain the problem. Next, call the subcontractor and explain that you've already talked to your insurer. Finally, keep cleanup to a minimum. Always ensure your sub-contractors have their insurance and request "proof of insurance" with your company as additional insured on the certificate before allowing them access to a site.

Do subcontractors need their insurance?

As a self-employed, it is your responsibility to make sure your policy covers are suitable for your business and offer cover. You can take many insurances, but, as mentioned above, two of the most important are Commercial General Liability and Professional Liability insurance.

What is the difference between a contractor being bonded and insured?

The most appealing subcontractors are often both bonded and insured. Insurance protects you in the event of an accident and allows you to operate legally. Bonds help create a trust that you'll complete the required project and enable you to work on public jobs.

How do you tell if a subcontractor is bonded?

Most suppliers and subcontractors will only work with a contractor who has a bond in place. Ask them for a bond number and certification to determine whether your contractor is bonded. You should take extra precautions to ensure that both the bond and the license are up to date.

How to confirm a business is licensed, bonded, or insured?

- License :
Ask if the business is licensed and, if so, with whom. Then contact the licensing agency to confirm

- Insured
Ask the company to have its agent send a Certificate of Insurance directly to you.

- Bonded
Bonding is often a misunderstood and unique insurance product. Refer to this for better explanation on bond 
Get quote now..

Other Business Insurance Coverage You May Need

Small Business Owner Insurance Policy (BOP)
A small business owner policy (BOP) could consist of a couple of packages. The adhering to are the eight most common insurance policy coverage types that an entrepreneur must recognize.
Commercial General Liability
This coverage protects if bodily injury, property damages, injury, or advertising injury incur with your business.
Business Interruption
Have this coverage part of small business owner insurance to defend when business earnings and extra expenditure are at risk.
Product Liability
Secure against a business when found responsible for an issue with one of the items they offer.
Professional Liability
If a business within its skilled trade gives professional guidance or provides a professional opinion, it should probably carry professional liability insurance.
The Course of Construction Insurance
Secure against Construction If you are in the renovation of builders.
Equipment Breakdown
Defence against tools or equipment breakdown. (It can be a furnace or machine) when it requires time and money for a replacement.
Commercial Property
Secure against your content or stocks
Commercial Auto
Bundling with a small business owner package (BOP) to with business use vehicle including transport of cargo.
Other Coverage
  • Employment Practices Liability
  • Electronic Data and Equipment
  • Valuable Papers and Records
  • Job site Short-Term Pollution from Pollutants
  • Identity Theft
  • Blanket Insurance on valuable property
  • Limited Property of Others Liability
Cyber risk coverage
If you take online orders, store sensitive information on the computer, you need proper cybercrime protection. See this section about Cyber insurance.
Always Review Your Insurance Coverage
Over time, businesses may have an increasing need for insurance coverage as their business grows. Always review your insurance and fill in gaps as the situation changes.

As an insurance broker, we'll help small business owners within their skilled trades decide what is needed and the best fit for their insurance.

Get quote now..
What you need to know about Contractor Insurance Package: Be careful and detailed on all coverage. We issue liability, contractor insurance, and certificates fast, all in one. Call now to discuss the details.