Construction & Contractor Insurance Packages

Construction isn't one risk. A general contractor carries the whole project: the building under construction, every subcontractor's work and the owner's contract terms. A plumber's biggest exposure is water damage that shows up months after the job. A roofer works at height with open flame and exposed roofs. The program has to follow the work you actually do, and insurers price each trade differently.

Almost every contractor's program is built from the same parts. What changes between trades is the limit, the wording and the exclusions an insurer attaches.

For most trades, the expensive claims don't happen on the job. They arrive later, when a fitting fails behind a finished wall or a roof leaks through the first spring thaw. That is completed-operations liability: injury or damage caused by your work after it's finished and handed over. A CGL policy without it, or with a short completed-operations period, leaves the biggest exposure uninsured.

Contractor CGL policies also carry exclusions that generic summaries skip. Read these before you sign a contract, not after a claim:

Our guided tour of the CGL policy wording explains the insuring agreement and exclusions line by line.

Your contract decides how much insurance you need, often more than the size of your business would suggest. Many Canadian projects use Canadian Construction Documents Committee (CCDC) contracts, and the insurance schedule that goes with them is CCDC 41, CCDC Insurance Requirements. The December 14, 2020 edition sets these minimums for the contractor:

Owners often amend CCDC 41 or use an earlier edition, so the contract in front of you controls. Send us the insurance section of any tender before you bid. A shortfall found after award can cost you the job or the margin. Our post on why contracts ask for a certificate of insurance covers additional insured and notice wording.

An uninsured subcontractor's claim doesn't disappear. It lands on the general contractor's policy and loss history. Insurers rate GCs partly on how well they control their subs, and some ask for proof at audit or charge extra premium for subcontracted work without certificates.

A building under construction is a different risk from a finished one: open walls, temporary heat, hot work, theft of materials and weather against an unclosed envelope. Builder's risk, also called course of construction, insures the project itself, plus materials on site, in transit and in off-site storage, until completion or occupancy. Smaller trades installing equipment or materials use an installation floater for the same purpose.

The contract decides who buys it. Under CCDC 41 the contractor arranges broad form property at 1.1 times the contract price. On other jobs the owner insures the project and the contractor relies on that policy, which means you need a copy of its wording and deductible, because a deductible can be charged back to whoever caused the loss.

On larger projects, liability is often arranged as a wrap-up: one project-specific CGL policy covering the owner, general contractor and all subcontractors for the project and a completed-operations period after it. A wrap-up removes cross-claims between contractors on the same site. It doesn't cover your other jobs, your auto or your tools, so your own program stays in place. Our post on insuring the project before it exists covers start dates and occupancy.

Tools and equipment are the assets a contractor actually needs to earn money tomorrow, and they live in vans, trailers and unlocked sites. A standard commercial property policy covers contents at a named location. It won't follow a generator to a job site or a laser level left in a truck overnight. A tools and equipment floater does.

A bond is not insurance for you. It's a guarantee to the owner, backed by a surety that expects to be repaid by your company if it ever pays a claim. Bid bonds guarantee you will sign the contract at your bid price. Performance bonds guarantee you will finish the work. Labour and material payment bonds guarantee your subs and suppliers get paid. Sureties qualify contractors on financial statements, work in progress, experience and capacity, much like a lender. Our contract surety page explains how to build a bonding line, and our post on surety bonds for contractors covers each bond type.

In Ontario, the Construction Act and its General regulation set rules every contractor should know:

Other provinces have their own builders' lien statutes, with different holdback and timing rules, so we confirm the regime for each project's province before bonding it.

Every province runs a workers' compensation system, and construction is treated more strictly than most industries. In Ontario, the WSIB says people who own or run a construction business, with or without employees, must have coverage, including independent operators, sole proprietors, some partners and some executive officers who work in construction. Businesses must register within 10 calendar days of hiring their first employee.

Under WSIB policy, a principal that directly hires a contractor for construction work must obtain a clearance certificate before the work begins and keep it in effect while the work is done. Starting without one is an offence for both parties. Without a clearance, the principal can be held liable for the contractor's unpaid WSIB premiums, up to the labour value of the contract. A clearance is valid for up to 90 days, so long jobs need renewals.

In most cases, workers' compensation replaces a covered worker's right to sue a covered employer, but it doesn't close every gap. Employer's liability insurance responds to suits that workers' compensation doesn't bar: workers outside the system, some claims by employees of other firms, and work in jurisdictions where your coverage doesn't apply. Our post WSIB is not enough sets out the full stack.

Insurers don't price contractors on a flat rate. CGL is usually rated on annual revenue or payroll by trade, with subcontracted costs rated separately. Higher-hazard trades such as roofing, demolition and excavation sit in more expensive classes than finishing trades. The underwriter then adjusts for the specifics:

The wider market is favourable for buyers. Marsh's Global Insurance Market Index put overall Canadian commercial insurance rates down 6% in the third quarter of 2026, with property down 8%. Contractor liability classes vary more by trade and loss history than by the market, but a soft market is a good time to correct limits, add missing coverages and bundle policies on better terms. Get a quote with your revenue split by trade and a list of your largest contracts.