What insurance does a contractor need in Canada?

Most contractors need commercial general liability that includes completed operations, a tools and equipment floater, commercial auto for work vehicles, and workers' compensation where provincial law requires it. General contractors usually add umbrella limits, subcontractor certificate control and surety bonds. Contractors handling mould, fuel or asbestos should add contractors' pollution liability, which standard liability policies largely exclude.

What liability limit do general contractors ask subcontractors to carry?

It depends on the contract. Many subcontracts pass down the owner's requirements, and on projects using CCDC 41 (2020) the contractor must carry $10,000,000 per occurrence in general liability, with an umbrella allowed to reach it. Smaller residential jobs often ask for less. Read the insurance clause before you bid, because a shortfall found after award can cost you the job.

Do I need WSIB coverage if I have no employees?

In Ontario, usually yes. The WSIB says people who own or run a construction business, with or without employees, must have coverage, including independent operators and sole proprietors. The main exemption is for people doing home renovation work only, hired and paid directly by the homeowner. Taking even one other contract ends that exemption. Other provinces set their own rules.

What is a WSIB clearance certificate and why does a GC want one?

A clearance certificate confirms a contractor's WSIB account is in good standing. A principal that directly retains a contractor for construction work in Ontario must obtain one, and it relieves the principal of liability for premiums the contractor owes. A clearance is valid for up to 90 days and is renewable, so general contractors ask for new ones on longer jobs.

Does contractor insurance cover the cost to redo faulty work?

Usually not. A commercial general liability policy pays for injury and for damage your work causes to other property, such as a leak that ruins finished floors. The cost to repair or replace your own defective work is normally excluded. That is a business risk managed through quality control, contract terms and, for larger projects, the builder's risk policy.

What is completed operations coverage?

Completed operations covers injury or property damage caused by your work after the job is finished and handed over. A failed fitting that floods a finished floor months later is a typical example. For most trades it is where the largest claims arise, so confirm your general liability includes it and that you keep it in place as long as your contracts require.

Are my tools covered if they are stolen from my truck?

Only if you carry a tools and equipment floater, and only within its conditions. Many Canadian floaters cover theft from an unattended vehicle only after forced entry into a locked, fully enclosed body or compartment. Tools in an open truck box or an unlocked van may not be covered. Schedule expensive items individually, because blanket limits often cap any one tool.

Do I need my own insurance if the general contractor has a policy?

Yes, in almost every case. The general contractor's policy protects the general contractor. Subcontracts usually require you to carry your own general liability, name the general contractor and owner as additional insureds, and indemnify them for your work. A project wrap-up policy can cover your liability on that one site, but it does not cover your other jobs, vehicles or tools.

How is contractor insurance priced?

Insurers rate general liability on revenue or payroll by trade class, with subcontracted costs rated separately. They then adjust for residential versus commercial work, height, depth and hot work, years in business, safety programs, subcontractor certificates and claims history. Limits and deductibles move the price. Tools are priced on values and storage, and vehicles on drivers and use.

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Contractor Insurance in Canada

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In short

A contractor in Canada needs commercial general liability that includes completed operations, a tools and equipment floater, commercial auto for work vehicles, and workers' compensation where provincial law requires it. In Ontario, construction business owners must generally have WSIB coverage even without employees. General contractors add umbrella limits to meet contracts, subcontractor certificate control and often surety bonds. Subcontractors need certificates that match each GC's contract.

Last reviewed October 27, 2026

Canadian insurers we compare for general contractors and subcontractors: 17; Canadian insurers we compare for general contractors and subcontractors
To register with the WSIB after hiring your first employee in Ontario: 10 days; To register with the WSIB after hiring your first employee in Ontario
Maximum validity of an Ontario WSIB clearance certificate, renewable (WSIB policy 14-02-19): 90 days; Maximum validity of an Ontario WSIB clearance certificate, renewable (WSIB policy 14-02-19)
General liability per occurrence required of the contractor by CCDC 41 (2020): $10M; General liability per occurrence required of the contractor by CCDC 41 (2020)

Contractors are judged by their certificate before they are judged by their work. General contractors and commercial clients want proof of general liability with completed operations, the right limits and their names added as additional insureds before you start. Behind that certificate, the policy has to respond when a fitting fails after handover, a crew damages a neighbour's property or tools vanish from the van.

We build programs for general contractors and subcontractors around the work you actually do: CGL and umbrella limits sized to your contracts, tools and equipment cover that fits how you store gear, commercial auto, and the WSIB and certificate discipline that keeps you eligible to bid. For project cover such as builder's risk, see the construction and contractor guide.

What the package includes

Commercial general liability with completed operations
Umbrella and excess limits to meet GC and owner contracts, including CCDC 41
Tools and equipment floater, including rented equipment
Commercial auto and non-owned auto for crew vehicles
Installation floater for work and materials before acceptance
Employer's liability alongside WSIB or provincial workers' compensation
Contractors' pollution liability
Certificates and additional insured endorsements for each contract

General contractors and subcontractors: two sides of the same contract

This page is about insuring the contracting business: the company that signs contracts, hires crews, drives to sites and carries the liability for its work for years after it leaves. It covers general contractors who run jobs and subcontractors who perform a trade under someone else's contract. For insurance that belongs to a single project, such as builder's risk and wrap-up liability, see our construction project insurance guide. For the whole sector, including bonding and Ontario's Construction Act, see construction and contractor insurance.

The insurance question is the same on both sides of a subcontract: who pays when the work hurts someone or damages property? A general contractor answers to the owner for everything on site, including the work of every sub. A subcontractor answers to the GC, and the subcontract usually pushes that risk down with an indemnity clause and a list of insurance the sub must carry. Getting on site depends on a certificate that matches that list. Keeping the business depends on the policy behind it actually responding.

The coverages a contractor needs, and why

Most contractor programs are built from the same parts. What changes between a two-person sub and a GC with ten trades on site is the limit, the wording and the exclusions.

Core coverages for general contractors and subcontractors
Coverage	What it answers	Points to check
Commercial general liability (CGL)	Injury to the public or damage to someone else's property from your operations	Completed operations included, no residential or height restrictions you can't live with, subcontracted work conditions
Umbrella or excess liability	Contract limits above your CGL and auto limits	Follows form over the CGL, auto and employer's liability, and the aggregate is adequate for the year
Tools and equipment	Theft or damage to tools, equipment and rented gear on sites, in vehicles and in storage	Per-item cap, the locked vehicle condition, rented equipment, waiver of subrogation where contracts demand it
Commercial auto	Vans, pickups and trucks, plus employees driving their own vehicles on business	All vehicles listed, non-owned auto, auto limits that fit under the umbrella
Installation floater or builder's risk	Damage to the work and materials before the owner accepts them	Who insures the project under the contract, and the deductible you could be charged
Employer's liability	Injury suits that workers' compensation does not bar	Workers outside the provincial system and work in other provinces
Contractors' pollution liability	Spills, mould, dust and fumes that standard CGL largely excludes	Required by CCDC 41 at $5,000,000 per occurrence on contracts that use it

General contractors that bid public or institutional work also need a bonding line. A bond is a guarantee to the owner, not insurance for you, and our contract surety page explains how sureties qualify contractors.

The claims that actually happen

The scenarios below are hypothetical. They reflect the claim types underwriters ask about on every contractor application, and they show why the policy that responds is not always the one you expect.

Hypothetical contractor claims and the policy that responds
Hypothetical scenario	Allegation	Policy that responds
A fitting installed by your plumbing sub fails six months after handover and floods two finished floors	Faulty work caused property damage after completion	The sub's CGL under completed operations, and your CGL if the owner sues the GC as well
A pedestrian trips over hoarding your crew moved onto the sidewalk	Bodily injury to the public	Your CGL
Your drywall sub has no insurance, and its worker's ladder damages the owner's equipment	Property damage on your project	Your CGL, with the loss on your record and possibly extra premium for uninsured subcontracted work at audit
Tools are taken overnight from a van with no sign of forced entry	Theft	Possibly nothing; most tool floaters require forced entry into a locked, enclosed vehicle
The owner says your framing is out of level and must be redone	Faulty workmanship, no other damage	Usually not insured; CGL pays for damage your work causes to other property, not the cost to redo your own work
An employee is injured and sues the GC, a separate company on site	Third-party injury claim	Depends on workers' compensation coverage of each firm; employer's liability fills some gaps

The faulty-workmanship line is the one contractors misunderstand most. Our guided tour of the CGL wording explains the your-work exclusion and what it leaves covered.

WSIB and workers' compensation for contractors

Construction is treated more strictly than most industries. In Ontario, the WSIB says people who own or run a business in construction, with or without employees, must have coverage, including independent operators, sole proprietors, some partners and some executive officers. A business must register within 10 calendar days of hiring its first employee.

A principal that directly retains a contractor for construction work must obtain a WSIB clearance certificate. Under WSIB policy, the clearance relieves the principal of liability for premiums and other amounts the contractor owes the WSIB, and is valid for up to 90 calendar days, renewable. For a GC, that means a clearance from every sub before work starts and fresh ones on long jobs. For a sub, it means no clearance, no start date.

There is one narrow exemption. The WSIB says individuals, partnerships or corporations performing home renovation work only, hired and paid directly by the homeowner or resident, are exempt from mandatory coverage for themselves. Take on even one contract that is not a home renovation and the exemption is lost. Most contractors who work for GCs or commercial clients therefore need coverage.

Other provinces run their own systems. In British Columbia, WorkSafeBC warns that if you hire a subcontractor who is not paying its premiums, you could be liable for premiums relating to the work, and that a clearance letter addressed to you, showing the sub was in good standing for the whole contract period, removes that liability. In the other provinces we serve, check the rules with your provincial board. Workers' compensation also doesn't close every gap, which is why we add employer's liability. Our post WSIB is not enough sets out the full stack.

Trade certification, licensing and permits

Insurers ask who does the regulated work, because an unqualified trade doing it is both a legal problem and a claims problem. The rules come from several places.

Ontario compulsory trades: under the Building Opportunities in the Skilled Trades Act, 2021, some trades can only be practised by a certified journeyperson or registered apprentice. The province lists construction and maintenance electrician, domestic and rural electrician, and plumber among the compulsory trades, and general carpenter among the non-compulsory ones. A GC that lets an uncertified worker do compulsory-trade work invites enforcement and an awkward claim.
Electrical and gas work carry separate licensing and permit regimes in each province. Confirm your subs hold the licence the work requires and keep a copy with their certificate.
New homes: in Ontario, builders and sellers of new homes must be licensed by the Home Construction Regulatory Authority. Renovations of an existing home typically do not make it new, so they do not require that licence. See our renovation contractor guide for renovator rules in other provinces.
Municipal business licences and building permits vary by city. Check with each municipality you work in, and remember that unpermitted work is hard to defend after a claim.

GC and owner contract requirements: what the certificate must show

The contract decides your limits, often more than your revenue would suggest. On projects using CCDC contracts, the insurance schedule is CCDC 41. The 2020 edition requires general liability of at least $10,000,000 per occurrence with a $10,000,000 completed-operations aggregate, coverage no less than IBC Form 2100 and IBC Form 2320, and permits an umbrella to reach the limit. It also requires $10,000,000 auto liability, all risks contractors' equipment that does not allow subrogation against the owner, and $5,000,000 contractors' pollution liability. Owners often amend it, so the contract in front of you controls.

Subcontracts usually pass a version of these terms down. Before you sign, check:

The limits per occurrence and aggregate, and whether an umbrella is accepted.
Additional insured status for the GC and owner on your CGL, and whether it must extend to completed operations.
A waiver of subrogation in favour of the GC or owner, on liability or on your equipment floater.
Notice of cancellation, the certificate holder's exact legal name and the project name.
How long completed-operations coverage must be maintained after the job ends.

We issue a certificate of insurance for each contract and check it against the clause before it goes out. Send us the insurance section with the request so the first certificate is the right one.

If you hire subs: subcontractor control

An uninsured sub's claim doesn't disappear. It lands on the GC's policy and loss record. Insurers rate GCs on how well they control their subs, and some charge extra premium at audit for subcontracted costs without certificates.

Use a written subcontract with an indemnity and insurance clause that mirrors your contract with the owner.
Collect a CGL certificate naming you and the owner as additional insureds before the sub starts, and diary every expiry date.
Check that the named insured matches the company you contracted with, and that completed operations is included.
Collect a WSIB clearance certificate in Ontario, or the provincial equivalent, before work begins and renew it on long jobs.
Keep payroll for your own crews separate from subcontracted costs. Auditors rate them differently.

Trade-specific risks are covered on our sibling pages, including plumbers and carpenters.

Exposures that decide contractor claims

Generic summaries skip the points that cause disputes after a loss. These are the ones we check on every contractor policy.

Completed operations: most expensive contractor claims arrive after the job is handed over. A CGL without it, or with a short period, leaves that exposure uninsured.
Faulty workmanship: the policy usually pays for damage your work causes to other property, not the cost of redoing your own work.
Hot work: welding, torching and cutting near combustibles are a common fire cause. Insurers ask about hot work permits and fire watches.
Water damage: plumbing, roofing and any work that opens the envelope can cause losses far larger than the contract value.
Height, depth and residential restrictions: some wordings limit roofing above a set height, excavation below a set depth, or new residential construction.
Tools in vehicles: most floaters cover theft from an unattended vehicle only after forced entry into a locked, enclosed body or compartment.
Pollution: mould, dust, fuel and asbestos disturbed during work are largely excluded from CGL and need a separate pollution policy.

What contractor insurance costs: the rating logic

Contractor CGL is usually rated on annual revenue or payroll by trade class, with subcontracted costs rated separately. Higher-hazard trades such as roofing, demolition and excavation sit in more expensive classes than finishing trades. A GC that subcontracts most work is rated on the subcontracted costs and on how well it controls them.

The underwriter then adjusts for the specifics: the split between residential, commercial and new construction, any height, depth or hot work, years in business, a written safety program, and claims history, where frequency matters as much as size. The limit drives price too, so ask to see the umbrella priced alongside the base CGL. Tools are priced on values and storage, and vehicles on drivers and use.

The market is currently favourable for buyers. Marsh's Global Insurance Market Index put overall Canadian commercial insurance rates down 6% in the third quarter of 2026. Contractor classes vary more by trade and loss history than by the market, but it is a good time to correct limits and add missing coverages.

How we build a contractor insurance program

1Map the work: we confirm your trades, residential and commercial split, project sizes, provinces and how much you subcontract.
2Read the contracts: we check the insurance clauses of your typical GC or owner contracts, including CCDC 41 and any amendments.
3Confirm compliance: we check WSIB or provincial board status, trade certification for compulsory work, and your subcontractor certificate process.
4Schedule the assets: we list tools, equipment and vehicles with serial numbers and replacement values.
5Market it: we take the submission to the insurers on our panel of 17 whose appetite fits your trade and contract profile, and compare completed-operations terms and exclusions, not just price.
6Keep it current: we issue certificates for each job, update revenue and payroll at audit, and review limits every year.

Good to know

Frequently asked questions

What insurance does a contractor need in Canada?: Most contractors need commercial general liability that includes completed operations, a tools and equipment floater, commercial auto for work vehicles, and workers' compensation where provincial law requires it. General contractors usually add umbrella limits, subcontractor certificate control and surety bonds. Contractors handling mould, fuel or asbestos should add contractors' pollution liability, which standard liability policies largely exclude.
What liability limit do general contractors ask subcontractors to carry?: It depends on the contract. Many subcontracts pass down the owner's requirements, and on projects using CCDC 41 (2020) the contractor must carry $10,000,000 per occurrence in general liability, with an umbrella allowed to reach it. Smaller residential jobs often ask for less. Read the insurance clause before you bid, because a shortfall found after award can cost you the job.
Do I need WSIB coverage if I have no employees?: In Ontario, usually yes. The WSIB says people who own or run a construction business, with or without employees, must have coverage, including independent operators and sole proprietors. The main exemption is for people doing home renovation work only, hired and paid directly by the homeowner. Taking even one other contract ends that exemption. Other provinces set their own rules.
What is a WSIB clearance certificate and why does a GC want one?: A clearance certificate confirms a contractor's WSIB account is in good standing. A principal that directly retains a contractor for construction work in Ontario must obtain one, and it relieves the principal of liability for premiums the contractor owes. A clearance is valid for up to 90 days and is renewable, so general contractors ask for new ones on longer jobs.
Does contractor insurance cover the cost to redo faulty work?: Usually not. A commercial general liability policy pays for injury and for damage your work causes to other property, such as a leak that ruins finished floors. The cost to repair or replace your own defective work is normally excluded. That is a business risk managed through quality control, contract terms and, for larger projects, the builder's risk policy.
What is completed operations coverage?: Completed operations covers injury or property damage caused by your work after the job is finished and handed over. A failed fitting that floods a finished floor months later is a typical example. For most trades it is where the largest claims arise, so confirm your general liability includes it and that you keep it in place as long as your contracts require.
Are my tools covered if they are stolen from my truck?: Only if you carry a tools and equipment floater, and only within its conditions. Many Canadian floaters cover theft from an unattended vehicle only after forced entry into a locked, fully enclosed body or compartment. Tools in an open truck box or an unlocked van may not be covered. Schedule expensive items individually, because blanket limits often cap any one tool.
Do I need my own insurance if the general contractor has a policy?: Yes, in almost every case. The general contractor's policy protects the general contractor. Subcontracts usually require you to carry your own general liability, name the general contractor and owner as additional insureds, and indemnify them for your work. A project wrap-up policy can cover your liability on that one site, but it does not cover your other jobs, vehicles or tools.
How is contractor insurance priced?: Insurers rate general liability on revenue or payroll by trade class, with subcontracted costs rated separately. They then adjust for residential versus commercial work, height, depth and hot work, years in business, safety programs, subcontractor certificates and claims history. Limits and deductibles move the price. Tools are priced on values and storage, and vehicles on drivers and use.

Sources

Mandatory coverage in the construction industry. Workplace Safety and Insurance Board (WSIB), Accessed October 26, 2026.
Operational Policy Manual 14-02-19, Clearance Certificate in Construction. Workplace Safety and Insurance Board (WSIB), January 2, 2020.
Questions and answers: Expanded compulsory coverage in construction (home renovation exemption). Workplace Safety and Insurance Board (WSIB), Updated July 20, 2026.
Why do I need a clearance letter?. WorkSafeBC, Accessed October 27, 2026.
Compulsory trades and enforcement. Government of Ontario, Updated October 9, 2026.
CCDC 41, CCDC Insurance Requirements (publication date December 14, 2020). Canadian Construction Documents Committee, as published by the Roofing Contractors Association of BC, December 14, 2020.
Canada commercial insurance rates fall for third straight year (Marsh Global Insurance Market Index, Q3 2026). Insurance Business Canada, October 21, 2026.

This page is general information, not insurance or legal advice. Coverage depends on your policy wording and the insurer. Speak with a licensed broker about your situation.

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