What 7 coverages should be in your business insurance for contractors?

If you are a sole proprietor, subcontractor or general contractor bidding on projects in Ontario, this seven-point decision checklist spells out the specific coverages, endorsements and proof clients usually expect. It focuses on practical details that affect bids and contracts, the typical limits and wording to check, and how to compare quotes from a provincially licensed broker without leaving coverage gaps.

Two regulatory reminders up front. Insurance agents and brokers must be licensed where they operate, so work with a provincially licensed broker for Ontario coverage. The Ontario government and the federal Financial Consumer Agency of Canada recommend getting multiple quotes when buying business insurance to find the best fit for cost and protection. See Ontario guidance on business insurance and federal advice on buying insurance for more on this. (Getting an insurance policy)

1. Commercial general liability (CGL): primary protection for third-party claims

What CGL covers

Commercial general liability protects you if a third party suffers bodily injury, property damage or a personal or advertising injury claim arising from your operations. For contractors this is the cornerstone policy clients and procurement officers request because it covers the most common on-site accidents and third-party exposures.

What limits and wording to verify

Contract documents frequently specify per occurrence limits and aggregate limits. Requested minimums vary by client and project size, so confirm the contract language before assuming a standard limit. When you compare quotes, check whether coverage is written on an occurrence basis or a claims-made basis, and whether limits apply per occurrence or as an aggregate. Occurrence policies typically offer broader long-term protection for contractors who may face claims after a project completes.

For general guidance on buying insurance in Canada see the Financial Consumer Agency of Canada and for Ontario-specific recommendations see the provincial business insurance page.

Learn more about contractor liability and market placement at the Chase Insurance Brokers article on business insurance for contractors and the firms small business insurance overview.

2. Wrap-up and contractual liability: meet client and procurement requirements

Why these endorsements matter

Public-sector clients and prime contractors often shift risk through contract clauses, insist on specific hold harmless wording or require contractors to be added as additional insureds. Wrap-up arrangements, contractual liability coverage and additional insured endorsements let your policy respond to those contractual obligations rather than leaving you personally exposed.

How to confirm you meet contract language

Before signing a contract, identify the exact insurance wording. Does the client ask for a specific limit, a waiver of subrogation, primary and non-contributory wording, or an endorsement naming the owner or prime contractor as additional insured? Federal procurement guidance explains how contractors typically finance and transfer those risks through commercial insurance.

If a contract contains unusual indemnity wording or liability caps, ask your broker to review the clauses and provide written confirmation that the policy can be endorsed accordingly. Brokers can also advise when the market will not offer requested wording so you can negotiate contract changes before starting work.

3. Commercial auto and hired/non-owned auto: protection for vehicles on the job

Why personal auto is not enough

If you use vehicles for work, a personal auto policy often excludes business use or limits coverage. Commercial auto policies are designed for business operations and usually include higher liability limits and broader coverages for hired vehicles, employees driving for work, or client vehicles used by your crew.

Hired and non-owned auto coverage

Subcontractors frequently rely on rented vehicles or client-supplied transport. Hired auto coverage protects rented vehicles, while non-owned auto covers vehicles your employees drive but do not own. When bidding, verify whether the project requires proof of hired or non-owned auto coverage and confirm deductible, liability and damage limits on quotes.

Confirm vehicle use with your broker so the policy form and limits match your operations. See federal and provincial guidance for more on how business activities change the type of auto insurance you need.

4. Tools, equipment and property floater: protect jobsite assets and rented gear

What to insure

Tools, small equipment and materials left on site are frequent loss items for contractors. An equipment floater, inland marine policy or tools and equipment endorsement covers owned and sometimes rented gear against theft, loss and physical damage while in transit or on site. Contractors who transport materials between jobs should review transit coverage closely.

Common exclusions and deductible considerations

Watch for exclusions such as unattended vehicle theft where tools were left in an unlocked truck, or limits that exclude certain electronics and specialised instruments. Deductibles for floaters are often lower than standard property deductibles, but confirm whether coverage is a blanket limit or requires scheduled values for high-value items.

5. Builders’ risk and course of construction: cover work in progress

When builders’ risk is required

Builders’ risk, also called course of construction, protects buildings and structures during construction against physical loss, damage and certain soft costs. Owners, lenders and prime contractors often require it for larger projects because it directly insures the work in progress rather than relying solely on contractor property coverage.

Matching coverage to the project schedule

Match policy limits and the coverage period to the contract schedule. Builders’ risk policies typically cover materials on site, materials in transit and installed property, and can include extra expense or soft cost coverage for delay. Confirm whether the owner or the contractor is responsible for procuring the builders’ risk policy and ensure the certificate clearly states the project address and policy period.

6. Employers’ liability, workers’ compensation and employer’s practices liability

Provincial workplace insurance versus employer’s liability

In Ontario, employers must comply with provincial workplace insurance rules and workers’ compensation frameworks. Workers’ compensation covers employee workplace injuries under the provincial scheme. Employers’ liability and Employment Practices Liability Insurance protect against employment-related claims or third-party suits that are not covered by workers’ compensation.

What bidders will expect

Many clients will ask for proof of workers’ compensation account status or clearance from the provincial board and include it as a condition of contract payments. Keep up-to-date documentation ready when you bid and tell your broker about subcontractors so your coverage and premiums reflect the full labour mix.

See the Ontario business insurance page for what the province expects of employers starting or expanding operations.

7. Certificate, proof and endorsement checklist: what clients ask to see and how to present it

Documents clients typically request

• Certificate of Insurance listing policy names, limits, effective dates and named insured.
• Additional insured endorsement naming owner, developer or prime contractor, with primary and non-contributory wording when requested.
• Waiver of subrogation in favour of specific parties when contracts require it.
• Evidence of hired and non-owned auto coverage and an equipment floater where work involves rented vehicles or high-value tools.
• Workers’ compensation clearance or provincial account number proof.

How to get endorsements and a fast certificate

Ask your broker to prepare the certificate and requested endorsements before the project starts. Brokers place coverage and, when available from an insurer, obtain the extra wording. If you are bidding on multiple projects, keep a standard packet of your current certificate, endorsements and workers’ compensation documents so you can respond quickly to bid requests.

For procurement-focused notes on contractor liability and what buyers expect, see federal buyer guidance on contractor liability and the Office of Consumer Affairs tips for hiring contractors.

How to compare quotes without leaving coverage gaps

When you receive multiple quotes, compare like for like. Build a short comparison table that lists carrier, policy form (occurrence or claims-made), per occurrence limit, aggregate limit, deductibles, additional insured wording, waiver of subrogation status, hired/non-owned auto cover, equipment floater limits and any exclusions that affect your operations. The Ontario guidance suggests getting at least three quotes to ensure competitive pricing and adequate market fit.

Ask each broker these fast facts to speed accurate comparatives: estimated annual payroll, number of employees, vehicle list and business use, a schedule of owned equipment above a threshold value, and a recent loss run or claims history. Brokers use these facts to place comparable offers quickly and show where price differences reflect coverage gaps rather than better terms.

Broker verification and next steps

Before you bind coverage, verify that your broker is licensed to operate in Ontario. Ask for licence or registration details and confirm the broker has market access to multiple insurers so they can shop the market for the right combination of price and endorsements. Chase Insurance Brokers Ltd. is an Ontario brokerage with local presence in Whitby and access to multiple Canadian carriers, and they provide online quotes, phone assistance and scheduled meetings to help contractors compare options.

Fast next steps when preparing to bid. Assemble your payroll and vehicle list, identify high-value tools for scheduling, decide the minimum per occurrence limits you can accept, and request a written certificate and any required endorsements from your broker at least a few days before contract signature.

Frequently asked questions

What minimum liability limits should contractors in Ontario expect to carry for general contracting work?

There is no single provincial minimum for all contractors. Limits depend on client, project size and contract wording. Public procurement and many private clients commonly ask for specific per occurrence limits, so confirm contract requirements and obtain multiple quotes to ensure limits match obligations.

How do you confirm a broker and policy are licensed to provide Ontario coverage?

Ask the broker for their provincial licence or registration details and request a written statement confirming they are authorised to place Ontario business insurance. Government guidance explains that agents and brokers must be licensed in the province where they do business. (Getting an insurance policy)

Can a single policy cover tools, vehicles and liability or do contractors usually need multiple policies?

Contractors commonly purchase multiple policies or endorsements because a single CGL policy rarely covers owned vehicles, hired or non-owned autos or high-value tools. Equipment floaters, commercial auto and builders’ risk are typical companion covers. Your broker can package these with a primary liability policy for a coordinated program.

How many quotes should a contractor get and what facts will brokers need to provide fast, accurate comparatives?

The Ontario government recommends getting several quotes to compare coverage and price. Provide brokers with payroll estimates, vehicle lists, a schedule of owned equipment, details of subcontracting arrangements and recent claims history so quotes are comparable and precise.

For government guidance and procurement context see the Financial Consumer Agency of Canada and the Ontario business insurance page, and for contractor liability specifics see federal procurement notes on contractor liability.

Ready to get a custom contractors quote from Chase Insurance Brokers Ltd.?

References and helpful resources: Financial Consumer Agency of Canada: Getting an insurance policy, Ontario: Consider business insurance, CanadaBuys: Contractor liability, and Office of Consumer Affairs: Home renovations.