4 types of insurance every contractor should consider
Spring has sprung, the flowers are blooming and so are home renovations. Canadians are enjoying their space (especially their outdoor spaces) more than ever, and you might find yourself booked back-to-back. (Which is amazing!)
As a contractor – there are specific types of insurance coverages best to have in place before you break ground landscaping, building a deck, or reshingling a roof. Let’s take a moment to make sure that your business, yourself, and your employees are protected. And we’ve made it easy for you by breaking down the different types of insurance coverage you’ll need by answering some of the most frequently asked questions from contractor business owners:
I am a contractor. I know I am supposed to have coverage for liability… but how does it really cover me?
In simple terms, a general liability policy is designed to cover you for your negligence if you injure a person or damage their property. The policy is also designed to cover you when your product or your completed operation causes that injury or property damage.
It is important when establishing the coverage and the cost is what are you doing and what kind of service or product are you providing? There will be a decided difference in cost between the hot tar roofing team applying heat during installation and a one-man drywall installer putting up and mudding drywall. Connect with your broker. Let’s talk about what you do and what coverage best meets your needs.
If I injure a person? Does that include my employees? I have WSIB, shouldn’t that be enough?
WSIB is necessary when you have employees, and it is one of the best ways to ensure that an employee who is injured on a job site has access to income replacement, therapy and treatment, and when required a means to retrain. But there is an option for that employee to reject WSIB and hold you as the employer responsible. A general liability policy alone will not assist you so having an employer’s liability option available is worthwhile. Let’s talk about employer’s liability and whether that is something you should consider.
I have all my tools covered under my shop policy. Is that enough if I am taking them to a jobsite?
If you are going from site to site and you have your tools with you, we need to get you covered with a Tool Floater.
How do you do that? Well, we can do that in a couple of ways. First, a blanket amount for all the tools you carry with you with a maximum limit per individual tool. Often that number looks like a bigger number, such as a $10,000 blanket limit with a maximum per any one item of $1,000. Second, we can insure you based on a scheduled limit per tool where you tell us what each item is worth, and we identify each item to the insurance company. Either way, it does require a discussion, so let’s talk about what you have in your tool kit and how to best insure it.
I am renovating houses for my clients and sometimes I am asked to build a new house. Who covers that?
The answer to that is not so simple. A renovation can be covered by the client’s homeowner’s policy, but they need to get permission from their personal home insurer first. If the project is on the bigger side in terms of scope of work, the homeowner’s policy insurer needs to be informed and a builder’s risk could be provided there or through a standalone builder’s risk policy.
How do you obtain builder’s risk insurance? Good question. You as the contractor could also secure the builder’s risk policy on behalf of your client and show the owner of the property as the named insured and you the builder as the General Contractor. And if you are building on spec, you would need to get your own builder’s risk policy on that project.
Stay tuned for Part 2!
We understand that insurance for contractors can be overwhelming, so we want to break it down. Keep your eyes peeled for our next blog post to dig deeper into contractors insurance questions. In the meantime, feel free to connect with us directly to chat more about it – we love talking about insurance!