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What Type of Insurance Do B.C. Contractors Need?

It’s been said Canada has only two seasons: winter and construction. However, one’s left to wonder how much winter slows construction activity in Canada’s westernmost province. Recent industry figures suggest the construction industry in B.C. is booming. While that’s great news, you have to hope all those hardworking men and women in the industry have contractor insurance.

Statistics from the British Columbia Construction Association estimate the value of current construction projects in the province to be $134 billion, an eyebrow-raising 79% increase over the past five years. That’s a lot of heavy lifting for B.C.’s 26,262 construction companies, 92% of which are small businesses with fewer than 20 employees each.

Whether a design-build, general, or renovation contractor or subcontractor, all these professionals should protect themselves with an insurance policy. These workers know first-hand that the construction industry is inherently dangerous due to the risk of accidents or the possibility of being sued for third-party bodily injury or property damage. On that note, WorkSafeBC’s recent report on injuries in the construction industry says 4,000 workers were hurt last year, with 20% of those injuries resulting from slips, trips, and falls – incidents that tend to be the most expensive.

Insurance for Construction Businesses

Whether you’re a self-employed, independent contractor or the owner of a small construction business, you should have coverage to ensure you’ve got the financial support you need in the event of a lawsuit or damage and loss resulting from extreme weather or an accident.

Here’s a brief rundown of some common construction insurance coverages that go into a customized, comprehensive insurance policy for contractors and small business owners:

• Commercial general liability (CGL) insurance: CGL protects you from third-party bodily injury or property damage claims caused by your business resulting from negligence or unexpected accidents.
• Tools and equipment insurance: You invest thousands of dollars in the tools and equipment you need to do your job. Protect them with this form of property coverage. It provides financial protection for any transportable tools or equipment that contractors use to complete work-related projects.
• Commercial property insurance: If you have an office, home office, or storage compound where you store equipment and inventory, commercial property coverage safeguards the property, its contents, and inventory if damaged or destroyed by extreme weather, fire, vandalism, or if your place of business is burglarized and your possessions were stolen.
• Professional liability insurance: Nowadays, the lines are blurring between the role of a contractor and a design firm. That means contractors may be assuming more risk than what their existing policies cover. Or, if you’re a design-build contractor who provides services and advice for a fee, you could be held liable if you’re sued by a customer who suffers a financial loss alleging you were negligent or made a mistake. That’s when professional liability coverage (also called errors and omissions insurance) can make a difference.
• Pollution liability insurance: Almost all construction or renovation work can expose you and others to pollution and possibly toxic substances. This type of coverage protects you from lawsuits or environmental damage expenses because of your work.

Contractor Insurance: Vital for Your Risk Management Strategy

No one gets excited about buying insurance. But as a contractor, if you’re not insured, you may miss out on getting hired for different projects. Worse, if you suffer one serious incident – damage resulting from a fierce storm, fire, vandalism, or theft at a job site – or an allegation of wrongdoing that leads to a lawsuit, it can be financially devastating and ruin your professional reputation.

That’s not something most of us want to think about or have even considered. But given how fraught with danger the construction industry is, it’s wise to err on the side of caution, explore your options, and get a free quote for commercial insurance. From there, speak to a licensed broker who can explain your policy details and advise you on the types of coverages and limits you need to be adequately protected.

You wouldn’t take an unnecessary risk working at a job site. So don’t take unnecessary risks with your career, welfare, and money.

Here to Help

No matter what stage of your business journey you’re at, Small Business BC has the resources you need to succeed. Check out our range of business webinars, on-demand E-Learning Education, our Talk to an Expert Advisories, or browse our selection of business articles.