For which business do you need insurance?

What type of insurance do you need as a contractor?

Some types of insurance are obligatory for particular types of contracts, others are optional or depend on what assets you have, such as a working vehicle, expensive tools, etc. The table below shows an overview of which insurance products you might need. In order to understand which insurance you need in your situation, get a quote using the form above and discuss your needs with a experienced insurance broker.

Your type of contracts Commercial General / Professional Liability Insurance Commercial Property Insurance Commercial Car Insurance Commercial Umbrella Insurance Business Interruption Insurance Builders Risk Insurance Commercial Building Insurance Group Insurance
Plumber Yes Sometimes2 Yes1 Sometimes3 No4 No No6 Sometimes8
Carpenter Yes Sometimes2 Yes1 Sometimes3 No4 Sometimes5 No6 Sometimes8
Electrician Yes No7 Yes1 Sometimes3 No4 No No6 Sometimes8
Millwright Yes Sometimes2 Yes1 Sometimes3 No4 No No6 Sometimes8
HVAC contractor Yes Sometimes2 Yes1 Sometimes3 No4 No No6 Sometimes8
Construction workers Yes Sometimes2 Yes1 Sometimes3 No4 Sometimes5 No6 Sometimes8
Other contractors Yes Sometimes2 Yes1 Sometimes3 No4 No No6 Sometimes8
  1. Required if you have a car that you use to drive to your contract assignments – this is often a case with contractors;
  2. Is recommended if you have some assets to cover such as tools, inventory, etc;
  3. Only if liability coverage is not available in your commercial general insurance or professional liability insurance;
  4. Optional protection depending on your decision – covers loss of income due to a number of pre-defined reasons
  5. Often a builder, not a contractor will have this insurance
  6. Is not required unless you are operating your contracting business out of a dedicated commercial building / office
  7. Not needed unless you have very special tools
  8. Only if you have a company that hires other full-time employees whom you want to offer a benefit package or insurance protection.

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What is typically covered by different elements of contractor insurance?

Insurance Brief description Risk to cover — example
 
Commercial General Insurance / Professional Liability
 Insurance that covers risk of liabilities resulting from various claims such as bodily injuries, personal injuries, property damages that are caused by business operations, products, services or take place on the business premises. You are sued by a customer who got hurt by stepping on a pipe resting on the floor or scratched by a sharp fixture corner or fell down the stairs because you have not fixed properly some stairs elements
 
Commercial Property Insurance
 Insurance that covers any type of commercial property from a number of risks such as e.g. theft, fire, natural disasters Damages and theft of expensive equipment such as electronic measuring devices, electric saw, etc.
 
Commercial Car Insurance
 Insurance that covers business use of cars, trucks, vans and any other means of transportation. This policy can include coverage of vehicles (e.g. damages), drivers (e.g. medical costs, rehab, loss of income, funeral expenses), liability (e.g. damages to the third-party), uninsured motorist protection, comprehensive coverage (e.g. theft, fire etc.) and number of other protections. Any accidents that occur when you are driving from your home or office to the customer / construction site.
 
Commercial Umbrella Insurance
 An insurance policy that supplies an additional liability in case your commercial general insurance / professional liability policy does not have it or it is too small If e.g. your professional liability policy has only $500,000 coverage but you feel that $1,000,000 or $2,000,000 can be more appropriate.
 
Business Interruption Insurance
 Insurance that covers business income that is lost due to natural disasters that caused an interruption of business operations e.g. closing a factory due to a disaster or re-building it. It typically covers lost profits, incurred operating expenses, moving/relocation costs to a temporary location and some other costs. If a warehouse where your materials were saved burned down due forest fires and, as a consequence, you could not work on your construction jobs due to a lack of materials.
 
Builders Risk Insurance
 Insurance that covers risk of damages to the building or materials as long as construction or renovation is not completed. It covers damages and losses from fire, wind, fall victims, vandalism, theft and many others. This insurance typically expires once the construction is over. If you need to store your materials for a longer period of time as a contractor outside of a building, in an unsafe neighbourhood where you see a risk of theft.
 
Group Insurance
 Combination of the following types of insurance that you can offer to your employees as a part of the compensation / benefits package: life insurance, health insurance / health benefits, critical illness insurance, disability insurance, drug plans etc. In order to attract the best talent, you want to consider offering group insurance packages comparable with those offered in the industry. Without that you might be loosing great candidates who could be interested in that form of benefits
 
Commercial Building Insurance
 Insurance that covers various types of commercial property from pre-determined risks (also called perils) such as theft, natural disasters, fire. Typically no. You do not need it unless you own a building and use it to operate your plumbing business.

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