In construction and other similar fields, a contractor is a company or a person hired by a client to complete a certain project. There are various kinds of contractors, from large contracting firms, to small contracting companies, and even individual independent contractors. These contractors can specialize in a wide range of fields such as general construction, residential renovation, masonry, waterproofing, roofing, plumbing, landscaping, and so on.
Virtually all kinds of contractors can benefit from a personalized contractor insurance plan offered by a top-notch broker like KASE Insurance. This is because contractors are faced with a number of risks as they carry out their job tasks. Such risks can involve third-party individuals (e.g. the general public, the client, suppliers), third-party properties, and in some cases, to themselves. In fact, the average number of deaths in Ontario construction sites is around 20 per year. Though this may seem like a small number, it goes to show that such worst-case scenarios can happen even to the most skilled workers.
As a business owner or independent contractor you may be wondering about the contractor insurance cost in Ontario and if it is worth it. This article sheds light on this and more.
Let’s get started!
What Does Contractor Insurance Mean?
Contractor insurance is typically used to pertain to contractor liability insurance since this is considered as the foundational insurance policy for all contractors.
However, such insurance policies can be customized with additional coverage depending on the contractor’s preferences as well as the recommendations of a trusted insurance brokerage like KASE Insurance.
Why Contractors Need Contractor Liability Insurance
Contractor liability insurance is considered the foundational insurance policy for contractors because of its broad coverage against unforeseen events that can result in hefty legal costs, medical costs, and/or repair costs.
Contractor liability insurance protects your business from risks such as:
- Damage to third-party property during the project
- Bodily injury to third-party individuals during the project
- Damage to third-party property and bodily injury to third-party individuals after the project is completed
- Advertising and reputational injuries caused to third-party individuals or other businesses
In general, all businesses are advised to get general liability insurance as part of their risk management. This is because nearly all businesses can, in some way, cause or aggravate injuries or property damage. Arguably, this increases for contracting businesses because one or more of the following elements are typically present in a contractor’s project including:
- The use of high-powered tools and machinery
- The use of heavy materials
- Working with hazardous materials
- Working from a height
- Working in proximity to third-party individuals
- Working in proximity to other property
- Working on projects that can affect a structure’s integrity
If you’ve already done some research regarding the contractor insurance cost in Ontario, you most likely would have seen clear disclaimers that prices can vary. This is because determining the cost of contractor insurance depends on a number of factors such as the following:
1. How long the business has been operating
Insurance providers are aware that around 50% of Canadian SMBs close before reaching the five-year mark. The length of time that a business has been around can give an idea of how well-established the business is; and typically, with all other things equal, insurance providers grant a lower premium for an established business.
2. Type of contracting services that you provide
The type of contracting services that you provide correlates to what industry-related risks you are exposed to. More high-risk contracting services will typically require a higher premium.
3. The size of your company or how many employees you have
In general, the more employees that you have, the more chances that accidents such as injuries and property damage can occur. This is why having more employees can increase your business insurance premium.
4. How much your coverage limit is
Higher coverage limits will translate to higher premiums as well. If you’re not sure what your coverage limit should be, a trusted insurance brokerage like KASE Insurance will be able to help you choose the fitting amount for the needs of your business.
5. Whether or not you will opt for additional coverages
If you opt to have additional coverages on top of your contractor liability insurance, this will also increase your premium.
6. Insurance and claims history
If your business has been insured in the past and you’ve had a history of filing claims, such claims can be taken into account to assess your current risk. However, for claims that are related to events that are completely not within one’s control (e.g. natural disasters), most insurance providers will exclude these as they assess your current risk.
How Much Does Contractor Insurance Cost in Ontario?
Not including additional coverages, the contractor liability insurance cost in Ontario lands at an average of $55 to $67 per month for a coverage limit of around $1 to $2 million. For higher coverage limits of around $5 million, the premium can go over $100 per month.
It’s important to note that certain factors can contribute to premiums increasing or decreasing these figures.
The Benefits of Getting a Quote For Contractor Insurance from KASE Insurance
There are three main advantages of getting a quote from a trusted insurance brokerage like KASE Insurance: (1) you save time and effort, (2) you save money, and (3) you’re presented with the best options.
Insurance brokers do not work for an insurance company; they work for you. This means that they can recommend a wide array of options for your insurance needs. Our insurance brokers at KASE Insurance will do the research for you so that all you need to do is choose from their recommendations. They can present you a detailed comparison that goes into the coverages, exclusions, cost, and much more. Additionally, you save money through our insurance brokers because they can find the best options that will fit your insurance needs as well as your long-term budget.
Whether you are an independent contractor, a business owner of a small contracting company, or a business leader of a larger contracting firm, we can give you the tailor-fit contractor insurance plan that addresses your needs, thereby propelling your business to a more secure and successful future. If you have questions for us, our friendly team of professionals is ready to answer.