Both general contractors and specialty contractors play critical roles in the completion of construction projects. General contractors oversee and coordinate projects. Meanwhile, specialty contractors perform specific tasks that require specialized training or licensure.
Specialty contractors, sometimes referred to as specialty trade contractors, are typically hired by general contractors to complete tasks in the following fields:
- Electrical
- Masonry
- Concrete
- Roofing
- Carpentry
- Elevator installation
- HVAC installation
- Demolition
- Asbestos removal
- Etc.
In this guide, you’ll learn more about specialty contractors insurance for various types of contractors. Let’s get started!
What is Specialty Contractors Insurance?
Specialty contractors insurance is a broad classification of commercial insurance. This term encompasses various types of insurance for different specialty contractors in diverse trades. At the core of nearly all specialty contractors insurance is commercial general liability (CGL) insurance.
It’s important to note that in some cases, CGL insurance is not enough to give specialty contractors the full scope of protection that they need. This is why a specialty contractors insurance plan can also be prepared as an insurance bundle that includes CGL insurance and other additional policies such as the following:
- Workers’ compensation insurance
- Commercial auto insurance or fleet insurance
- Commercial property insurance
- Installation & tools floater insurance
- Construction equipment insurance
- Pollution liability insurance
Why Is Specialty Contractors Insurance Needed?
Legal Requirements
In some cases, specialty contractors who work in high-hazard trades (e.g. electrical contractors/electricians) may be legally required to have insurance before applying for a business permit.
In most cases, however, specialty contractors insurance is needed for other reasons apart from legal necessity.
In Order To Get Hired
For example, if the insurance of the general contractor who’s hiring does not include subcontractors or specialty contractors, then specialty contractors insurance is needed. In cases like this, general contractors will usually consider hiring only the specialty contractors who are able to present an insurance certificate.
Protection from Financial Loss and Liabilities
Legal liability for property damage falls on who is directly responsible for the injury or property damage inflicted. This is why legal liability can fall on architects, engineers, general contractors, and specialty contractors — depending on the nuances of the incident.
By having the right scope of specialty contractors insurance, contractors can get protection for liabilities involving third-party property damage or bodily injury. Pollution liability coverage can also be included in the insurance bundle if it’s necessary for the specific trade.
Furthermore, specialty contractors insurance, when customized with essential additions, can protect specialty contractors from financial loss due to damage/vandalism/theft involving commercial property, equipment, tools, materials, commercial vehicles, and so on.
Examples of Specialty Contractors Who Require Insurance
All specialty contractors are recommended to have commercial general liability insurance and workers’ compensation insurance.
Commercial general liability insurance will give protection for the following:
- Third-party injuries tied to business operations;
- Third-party injuries within business premises;
- Third-party property damage connected to business operations;
- Third-party injuries and property damage due to failure of completed work; and
- Advertising and reputational damage.
Meanwhile, a reliable workers’ compensation insurance plan will give payouts if employees are injured, made ill, disabled, or pass away while completing job tasks.
In the following sections, we will look at how CGL and workers’ compensation insurance work for various types of specialty contractors. We will also discuss additional recommended coverages for each type.
1. Electrical Contractors
Considering the hazardous nature of electrical work, electrical contractors and electricians are required to have insurance. CGL insurance and workers’ compensation insurance will help protect both third-party individuals and employees from accidents related to live electrical components and fire.
This protection extends to completed work. If a structure catches fire due to faulty wiring and causes injuries and property damage, CGL insurance will cover the medical, repair, and legal costs, up to the coverage limit.
Other suggested coverages include the following:
2. Masonry Contractors
A few main hazards associated with masonry work include working from heights and possible structural collapse. This is why CGL insurance and workers’ compensation insurance are necessary to ensure employees, third-party individuals, and third-party properties are protected.
In case structural collapse or workmanship failure occurs after completion, CGL insurance will be triggered.
Other suggested coverages:
3. Concrete Contractors
Concrete contractors are responsible for creating structures with necessary, long-lasting, structural integrity — whether for a slab, wall, foundation, or flat roof. Workmanship failure involving concrete can result in catastrophic consequences. Additionally, a little-known dangers connected to wet cement is the possibility of inflicting chemical burns.
Therefore, concrete contractors are strongly advised to have updated CGL insurance and workers’ compensation insurance at all times.
Other suggested coverages:
- Commercial property insurance
- Commercial auto insurance or fleet insurance
- Pollution liability insurance (for soil/water contamination from concrete washout or lubricants used for concrete forms)
4. Roofing Contractors
The main hazard surrounding roofing work involves working from heights. This endangers both the roofers and the people in the lower areas. Falling tools and materials can inflict serious injuries and property damage.
Additionally, a collapsing roof during construction or after can be catastrophic. This is why CGL and workers’ compensation insurance are a must.
Other suggested coverages:
- Commercial property insurance
- Commercial auto insurance or fleet insurance
- Pollution liability insurance (in case roofing contractors get accused of mould contamination)
5. Carpentry Contractors
Carpenters work with high-powered tools and tend to work from heights every now and then. This makes the job prone to accidents from falling objects/devices, slips, trips, etc.
Furthermore, poor workmanship of structures and fixtures can lead to injuries and property damage. This makes CGL insurance and workers' compensation insurance necessary.
Other suggested coverages:
- Commercial property insurance
- Commercial auto insurance or fleet insurance
- Installation & tool floater insurance
- Pollution liability insurance (in case carpenters get accused of using mould-contaminated materials or introducing mould into an interior space)
6. HVAC Installers
Like other specialty contractors on this list, HVAC installers need to have CGL insurance and workers’ compensation insurance in case of accidents during installation.
Other suggested coverages:
- Commercial property insurance
- Commercial auto insurance or fleet insurance
- Installation & tool floater insurance
- Pollution liability insurance (in case HVAC units are found to be contaminated with disease-causing legionella)
Get Specialty Contractors Insurance That’s Customized For Your Business
Other specialty contractors with similar hazards to the ones listed above can also benefit from specialty contractor insurance. A few examples include demolition contractors, asbestos removers, elevator installers, and the like.
KASE Insurance, an award-winning insurance brokerage in Toronto, can give you the fully-customized insurance solution you’ve been looking for. No matter what type of services your contracting business offers, we can tailor-fit insurance plans to your specific risks.
Our dedicated team offers a hassle-free insurance experience by providing assistance for all your ongoing insurance needs.
Get started today by contacting our team or requesting a FREE quote!