Running a contactor’s business in Ontario is not easy and it’s especially important to make sure that all your business risks are covered. Even small contractors face many of the same problems as the larger companies, and they need insurance that is very similar. In fact, without a insurance policy specially designed for your business, you could be uninsured, and that can lead to disaster. Let’s look at Marvin C for an example.
Marvin always found electrical work to be rewarding and he worked for many years for a construction company as an electrician. However, he knew that some day he would strike out on his own and become an independent electrical contractor. One day Marvin received a financial windfall from an unexpected source and decided to make this dream come true. He had a flair for business and it did not take long for Marvin to have a thriving local electrician service with the right employees.
After a year in operation, Marvin placed a bid on a local construction project. He won the bid and that meant installing electrical services for a large residential subdivision, as a subcontractor. This changed his business risk factors, so Marvin called his insurance professional to discuss the kind of contractor insurance coverage he would need.
The new project went well, and after a couple of months all of the wiring was installed and the houses went up for sale. However, two years later, Marvin received a letter from the construction company that hired him, and it was not good news. A house had caught fire and burned down, causing serious injuries to one of the occupants. The homeowners sued the construction company for damages and now the construction company wanted damage money from Marvin’s company, because the cause of the fire was faulty wiring.
Marvin contacted his insurance specialist and everything was taken care of. Thankfully, he had chosen an experienced professional that provided loss assessment services, so he was fully covered.
What is a Contractors Coverage?
If you are a contractor you need to make sure you have the right kind of insurance. Whether its builders risk insurance, liability coverage, or coverage for your tools and equipment. Alll must be covered and in the proper amounts. This ensures that you can stay in business and pay the bills.
Who Should Take Out Contractors Insurance?
Do you perform construction or repair services for commercial or residential customers? Chances are, you need insurance for contractors. Here are some examples:
- Heating & air conditioning services
- Plumbing and electrical contractors
- Residential handyman services
- Excavating contractors
- Mechanical Contractors
- Restoration Companies
- Commercial and residential new construction companies
- Environmental Contractors
What is a Standard Contractor Insurance Policy?
You won’t find one policy that fits all contractors. That’s because these types of businesses vary so much when it comes to services and work performed. However, most contractors should consider these options:
- Commercial vehicle insurance – In Ontario businesses must have liability and Accident Benefit coverage and you might need other options like collision and comprehensive
- Commercial Property insurance for your building and office equipment.
- General liability insurance – this protects you from bodily injury and property damage lawsuits on and off your premises. It covers damages that occur as a result of your business operations.
- Equipment insurance – protects equipment from vandalism or theft while in your vehicle or at your job site.
When you buy a contractor’s policy you may want to think about these options:
- Course of construction coverage – also called builders risk insurance. You could be part way finished building a structure when a large storm destroys or seriously damages it. Your course of construction insurance will reimburse you for these damages, and allow you to rebuild or finish the project.
- Performance bond – this bond protects you if (for a covered reason) you cannot finish a job that you started. It will reimburse the person or company you are contracted with.
- Bid bond – suppose you were the successful bidder for a construction project, but cannot start the job. A bid bond covers issues like this.
- Wrap-up liability insurance – a wrap up liability is generally used on large construction projects to protect the owner, contractors, architects and engineers associated with the project once construction has been completed for a period of time specified by the policy. The policy will respond to bodily injury and property damage losses the insured becomes legally obligated to pay.
- Error and omissions – covers damages resulting from a mistake or faulty professional performance that you are deemed liable to pay.
- Environment liability – if your work results in pollution to the environment and needs extensive cleanup, this contractors insurance coverage will respond to the emergency.
In Search of the Best Insurance for Contractors
If you want the best possible insurance and the most affordable rates, you can check with many companies and compare coverage options and premiums. However, this could take a long time, and it’s much easier to simply go with an experienced insurance brokerage like Bunnell Hitchon Insurance Brokers Inc.
We have been around for more than a hundred years, and will be there for you when you need contractor insurance. As an independent insurance brokerage, we offer claims review and analysis services. We can find you the best deals on insurance, because we have many insurance partners. We offer a wide range of insurance options and we can even insure your US operations.