If you are an independent contractor, you may be wondering if you need insurance, and if so – what kind and how much? The short answer is that if you are an independent general contractor providing a service in Ontario, you need contractors’ insurance. This also applies to subcontractors and freelance contractors. The most common types of contractors who require contractors insurance are:
- Plumbing
- Construction
- Landscaping and snow removal
- Roofing
- Painting
- Carpentry and electrical work
- HVAC and air duct cleaning
- General cleaning
- Telecommunications
Contractors insurance is not one set kind of insurance; it can refer to multiple different kinds. These are the three most common types of coverage you will need as a contractor: General liability insurance provides coverage if you are held responsible for injuries or damage to a third party. It covers things like medical bills, repair costs, and legal costs if you are sued. Commercial property insurance protects your assets in case of fire, theft, or vandalism. It also protects your business locations and contents – and can be particularly valuable if you have expensive tools or equipment. Insurance protects you and your business – and gives you peace of mind. At Oegema, Nicholson & Associates, we want to help you understand why you need contractors’ insurance and how we can help you figure out what kinds of insurance you will need.
Customers Expect It
If someone is hiring you to make major changes to their home or business, they will want to know if you are insured and how much coverage you have. There are several reasons that a potential customer will want to make sure you have insurance:
- They know they are protected if anything goes wrong while you are building, fixing, or modifying their home or business.
- They also know they are protected if anything goes wrong after you finish the job.
- They know that you are a responsible business owner who has taken the right steps to comply with the law.
- They know that by having insurance, both you and they can have peace of mind that everyone is protected.
All of these are excellent reasons to make sure you are properly insured. A potential customer is much less likely to hire you if you are not insured.
It Protects You from Legal Risks
If you are a contractor, you can be sued for any number of things, from damaging a client’s property to causing bodily harm. You can even be sued if a competitor thinks you’ve said something in an ad that damaged their reputation. Working by yourself or having only a small number of employees will not protect you from having a lawsuit launched against you if a client feels you have damaged them or their property. Commercial general liability insurance will provide funds in several different situations:
- When you have to pay for a judgement or settlement
- Paying for property damage or medical bills
- Paying for legal bills
Purchasing Contractors’ Insurance
We hope you’ve enjoyed learning about contractors’ insurance. We’ve talked about the following:
- What professions need contractors insurance
- What exactly contractors insurance means
- The main reason you must have contractors’ insurance is that it’s required by law, it inspires consumer confidence, and it helps protect you in case of a lawsuit or other legal issues.
