Nobody likes to think about worst case scenarios. However, that is exactly what taking out insurance asks us to do. We have to imagine the worst and prepare for the unexpected, in a calm, knowledgeable manner. Insurance should allow business owners to sleep easy at night, knowing they will be taken care of if the unforeseen happens: whether it’s an accident, an honest mistake or a weather related complication. The booming real estate market in the Greater Toronto Area has created a lot of work for contractors and trades people. Insurance is an essential element of their day-to-day business requirements. It’s important to have a good broker design individually customized commercial insurance coverage for general contractors that meets their specific needs.

Why Insure?

In 2007, construction workers excavating a sewer line in Vancouver hit an oil pipeline, which caused a geyser of gushing oil, 30 metres high. The oil leaked into Burrard Inlet, homes nearby were covered in oil and the clean-up cost was $15 million. It is very unlikely that anything like that magnitude of a disaster will occur, but it is a significant reminder of the importance of insurance.

What Kind of Insurance?

General contractors need to consider a variety of insurance types. If a contractor works out of an office, property insurance will be required. Equipment should be covered for loss or theft. General liability insurance covers a wide range of accidents and mishaps. Builder’s Risk insures against loss or damage due to significant weather events such as windstorms or lightning as well as theft, fire or vandalism. Builder’s Risk  is usually obtained for a specific project rather than an ongoing business. Wrap-up liability insurance, which covers everyone who steps onto a worksite, should be obtained for large construction projects.

Construction bonds, also known as surety bonds, protects general contractors against an unfavourable event that causes a disruption in work or makes it impossible to complete the project. This could be due to insolvency of one of the parties or other unforeseen events. 

Mandatory Workplace Safety Insurance

A general contractor on a small renovation project may do all the work alone. More likely though, the contractor will be subcontracting to other professionals such as:

·       Carpenters

·       Concrete and Cement contractors

·       Electricians

·       Heating and Cooling specialists

·       Plumbers

According to the Government of Canada’sBusiness Ontario website, those that carry on a business in the construction industry as a contractor, sub-contractor, sole proprietor, partner in a partnership, or an executive officer in a corporation need to register with the Workplace Safety and Insurance Board (WSIB) for mandatory insurance coverage. This mandatory coverage applies to almost everyone in the construction industry. Details about specific requirements can be found on the WSIB website.

Finding the Right Broker

Each contractor and each job has many variables. It’s imperative to find a trustworthy insurance broker who can customize commercial insurance for individual general contractors. The broker should be experienced and knowledgeable, keeping up with current products, laws and regulations. The broker should be able to explain all the options to make sure the contractor has enough insurance, but is not over insured. Most of all, a good broker should give contractors confidence that the insurance will be there for the client when it’s most needed.