If you are running a construction site in Ontario, you know that the risks can be just as real as the rewards. Construction is the backbone of our local economy, but it is also an industry where a single accident or a midnight theft can wipe out a year’s worth of profit.
At Oegema, Nicholson & Associates, we have been insuring Ottawa’s builders and tradespeople since 1961. We know that “standard” coverage often leaves dangerous gaps. You might have WSIB for your workers, but who pays if a wall collapses on a neighbour’s car? Or if your skid steer is stolen from the job site?
To truly protect your balance sheet, you need a defence strategy built on three pillars. Here is a breakdown of the three essential types of builders insurance that every Ontario contractor needs to survive and thrive.
1. Commercial General Liability (CGL)
Do I really need liability insurance if I have WSIB?
Yes. WSIB only covers injuries to your own workers. Commercial general liability (CGL) covers your legal liability for third-party bodily injuries or property damage caused by your operations, including legal defence costs.
For contractors, CGL is the foundation of your risk management. It protects you when your operations cause harm to someone else: a client, a visitor, or a passerby. In today’s environment, even a minor lawsuit can cost tens of thousands of dollars to defend.
Why Ottawa Contractors Need Robust CGL
- The “Duty to Defend”: If you are sued, your insurer typically assumes the cost of your legal defence up to your policy limit. This protects your business capital from being drained by legal fees.
- City Permits: If you need a road cut permit or an encroachment permit in Ottawa, city bylaws strictly mandate a minimum of $2 million in CGL coverage. Without this coverage, your permit will be rejected.
- Completed Operations: The risk doesn’t end when you leave the site. If a deck you built in 2024 collapses in 2026 due to a defect, completed operations coverage ensures your policy still responds.
2. Commercial Property & Tools Coverage
Does my business insurance cover my tools if they are stolen from my truck?
Not automatically. Standard liability policies do not cover your property. You need a dedicated tools and equipment floater to protect your mobile assets from theft, fire, or damage while they are in transit or on the job site.
Ontario, and Ottawa specifically, has recently seen a spike in organized theft targeting high-value construction equipment. From handheld drills to heavy excavators, your assets are targets. A standard property policy only covers items at your office; to cover items that move, you need a floater.
Scheduled vs. Unscheduled: Don’t Get Caught in the Gap
To avoid paying out of pocket, you must understand how insurers categorize your gear:
- Unscheduled (Blanket) Coverage: Best for smaller, high-turnover items like saws, drills, and hand tools. You get a lump sum limit (e.g., $10,000), but there is often a maximum per item cap (e.g., $500). If your $2,500 specialized drill is stolen and it wasn’t listed separately, you might only recover the capped amount.
- Scheduled Coverage: Mandatory for major assets like backhoes, generators, or skid steers. You must list each item with its serial number and value. This ensures you get full replacement cost coverage rather than a depreciated cash value.
At ONA, our team works with you to identify the most impactful areas of coverage, developing a comprehensive plan that keeps you covered at a rate that works for your bottom line.
3. Commercial Auto Insurance
Can I use my personal truck for my contracting business?
Likely not, unless you have an endorsement. If you use your vehicle to transport tools, materials, or employees to job sites, a personal auto policy may deny your claim. Commercial auto insurance covers the higher liability risks and usage associated with construction work.
This is the most common coverage gap we see. Many contractors assume that because they own the truck, their personal insurance covers it. However, once you put a ladder rack on the roof, paint a logo on the door, or start hauling materials to a site in Orléans or Barrhaven, the usage changes fundamentally.
Why You Need Commercial Auto Policy
- Material Transport: Personal policies aren’t rated for the risk of hauling heavy loads, lumber, or volatile chemicals.
- Higher Liability Limits: In construction, a vehicle accident can involve serious damage to client property or multiple vehicles. Commercial policies generally offer higher liability limits (e.g., $2M to $5M) to protect your business assets.
- Multiple Drivers: If your crew drives your trucks, a commercial fleet policy simplifies coverage, ensuring that any qualified employee driving a company vehicle is covered.
Rounding Out Your Protection: Critical Add-Ons
While commercial general liability, tools, and auto are the “Big Three,” a comprehensive risk management plan often requires more specific protection depending on your trade.
| Coverage Type | Best For | What It Protects |
| Installation Floater | Plumbers, HVAC, Electricians | Covers specific materials (like a furnace, piping, or uninstalled fixtures) from theft or damage before they are permanently installed. Unlike a full builders risk policy, this targets just your materials on site. |
| Builders Risk | General Contractors, Home Builders | Covers the entire structure during construction (including materials and sometimes soft costs like delayed opening expenses) against fire, vandalism, and weather. |
| Pollution Liability | Excavators, Roofers, Painters | Protects you if your work causes environmental damage, such as a fuel leak from a tank or chemical runoff. CGL often excludes pollution events. |
| Cyber Liability | All Contractors | Protects your business if you store client data, process payments, or face a ransomware attack on your office systems. |
If you are the General Contractor, you likely need a broad form builders risk policy that covers the whole project, including soft costs (like delayed opening expenses and loan interest) if a fire sets your timeline back by months.
Frequently Asked Questions
What are soft costs in builders risk insurance?
Soft costs are the financial losses caused by a project delay, such as additional loan interest, legal fees, or rental costs. Standard builders risk covers “hard” materials, but you must specifically add soft costs coverage to be protected from timeline delays.
What is the difference between scheduled and unscheduled tools?
Unscheduled coverage provides a blanket limit for small tools (e.g., hand drills) but often caps the payout per item. Scheduled coverage lists high-value items (e.g., excavators) individually by serial number to ensure full replacement cost coverage without low sub-limits.
Can I use my home insurance for a renovation project?
Likely not. Standard home policies often exclude coverage for homes under major renovation or those vacated for more than 30 days. You typically need a dedicated builders risk policy to cover the structure during the construction phase.
Construction in Eastern Ontario is complex, with risks ranging from icy job sites to theft. Don’t rely on a “one-size-fits-all” policy or assume the general contractor insurance has you covered.
At Oegema, Nicholson & Associates, we don’t just sell policies; we offer real advice based on decades of local experience. We can help you audit your current coverage, ensure your tools are properly scheduled, and get you the certificates you need for City of Ottawa permits.
Ready to build with confidence?
