When Do I Need Construction Insurance in Ontario?

The construction industry is considered one of Canada’s most dangerous industries. This is because there are risks inherent to occupations within the construction sector. In Ontario alone, there are around 20 deaths per year in construction sites; mean while, there are around 357 injuries to Ontario construction workers each year. However, throughout the country, the most recent data tells us that there were 217 fatalities in construction, making the industry take up the biggest portion of the 951 overall reported fatalities. 

This article discusses the hazard factors that signal your business’s need for construction insurance. Let’s begin!  

How Dangerous Can Construction Be? 

One of the biggest clues of how dangerous the construction industry can be is the number of recent construction accidents in Ontario alone. Here are a few examples: 

• In early 2021, a construction worker in Toronto died after being hit by a falling piece of metal
• In early 2021, a man in Mississauga died after being hit by a construction vehicle
• In early 2021, a construction worker in Ottawa died after being struck by a wall
• In late 2020, a construction worker in Hamilton died after being hit by a construction vehicle
• In mid-2020, a construction worker in Markham died after a trench collapsed

It’s no question that construction work is among the most dangerous occupations. However, bodily injury within or around the construction site, though alarmingly common, is not the only potential liability. 

Construction businesses can also be responsible for property damage. Furthermore, faulty completed work can inflict damage and injury at a later time. Not to mention that construction businesses have an array of physical assets to safeguard. This is where construction insurance comes in. 

What is Considered Construction Insurance in Ontario? 

Construction insurance is often used to refer to commercial general liability (CGL) insurance for construction companies, which covers the following: 

• Third-party bodily injuries around project sites or business premises
• Third-party property damage due to business operations
• Third-party injuries/property damage caused by a faulty completed project
• Third-party reputational/advertising damages (e.g. copyright infringement, slander, libel)

Due to its vast scope of coverage relating to potential third-party lawsuits, commercial general liability is a fundamental and required part of any Ontario construction insurance. However, construction insurance bundles can also include:

• Builder’s risk insurance which covers the structure under construction as well as the materials/equipment therein (to an extent)
• Construction equipment insurance, which covers tools and equipment in case they are stolen, vandalized, or damaged
• Worker’s compensation insurance, which covers employees in the event that they are injured, made ill, or pass away at work. 
• Commercial property insurance, which covers the workplace/office/HQ/storage areas of the construction company whilst also providing compensation for lost income during business interruptions
• And more.   

You Definitely Need Construction Insurance If... 

1. Your Employees Work From Heights 

Falls are a common accident among construction workers. Moreover, falling tools, materials, and debris can also cause injuries to workers, as well as third-party individuals (e.g onlookers from the general public, clients looking at the project’s progress.) Falling items can also strike nearby property. 

For the reasons above CGL and worker’s compensation insurance are must-haves in your Ontario construction insurance if your employees are working from heights.

2. Your Business Uses High-Powered Equipment

High-powered equipment such as boom lifts, forklifts, bulldozers, skid steer loaders, excavators, trenchers, and etc. make construction work faster and easier when used correctly. However, accidents and miscalculations can happen which could lead to severe worker injuries. Equipment that’s being driven towards project sites can also hit third-party individuals, as we’ve seen in a recent incident mentioned above.

Furthermore, accidents can also cause damage to the equipment themselves leading to costly repairs or replacement. This is why CGL, worker’s compensation insurance, and tools/equipment insurance are crucial parts of construction insurance in Ontario. 

3. You Work Inside a Client’s Property, Near to Other Properties, or Amongst The General Public 

This point is congruent to the two previously mentioned points: working from heights and using high-powered tools . Both risks are compounded when your project site is within an existing property, close to other properties, or amongst the general public. The proximity makes injuries and damage more likely to happen, further necessitating CGL as part of Ontario construction insurance.  

4. Faulty Completed Projects Can Cause Property Damage and Injuries

Most completed construction projects, whether it’s building a structure from scratch or renovating an existing one, can cause property damage and/or injuries if mistakes are made during the building process. 

Here are some examples:

• A collapsing roof can harm the people underneath or hit appliances directly under.
• A faulty major foundation repair will mean the foundation may shift again soon and this will cause extensive structural damage throughout the house. 
• A mistake in waterproofing a finished basement will lead to water damage to the basement itself and the possessions therein. 
• Mistakes with plumbing can deal water damage as well, especially for pipes under drywall. Faulty electrical components will lead to a devastating fire incident.

The fact that CGL, yet again, covers the above risks shows just how crucial this insurance type is to the long-term security of your construction company.    

5. Incomplete Structures Are Exposed to External Forces 

Even if project sites are gated, they are still exposed to weather anomalies that can undo work, damage materials, or break newly added components. However, the weather isn’t the only external force to be concerned about. Vandalism and theft can occur even with well-guarded sites, leading to the loss of tools, scaffolding, materials, and so on. This is why Ontario construction insurance bundles are not complete without builder’s risk coverage .  

6. You Use Commercial Vehicles or Trucks 

As safe as your construction site may be, road accidents can still befall your commercial vehicles and trucks. This is why construction insurance with an added coverage of commercial auto insurance can save you thousands of dollars in repairs/replacement costs, medical bills, and legal fees. 

Personalized Construction Insurance For Your Business

KASE Insurance is an award-winning commercial insurance brokerage firm in Ontario. Over the years, we have helped numerous business owners in securing their businesses’ future with personalized insurance plans.

 If you need Ontario construction insurance set up, we can help you through all the stages of your insurance journey, from negotiating premiums to following up with claims. With our dedicated assistance, you can be sure you are in good hands. 

Contact us today or get started with a quick quote!