In Canada, contractors often overlook the possibility something might go wrong on a job site. Unlike the U.S., where lawsuits are very common, Canadians are often unaware that lawsuits can and do happen here too.
Unfortunately, many contractors are so busy doing their work, they don’t take the time to consider how their business will be impacted if something goes wrong. Without insurance, you put yourself at risk for massive losses and even bankruptcy. It is in your best interest and the interest of your staff and clients to seek out an insurance policy that protects you from liabilities, whether it is due to claims of poor workmanship (legitimate or frivolous) or due to accidents that damage property or cause personal injuries.
With the rising cost of settling claims, insurance premiums are generally a fraction of what it will cost you to pay out any form of damages from your own pocket. Many consumers will not be willing to hire a contractor that cannot prove they have insurance coverage. This can lead to lost jobs. Listed below are the many reasons contractors need insurance:
Contractor insurance coverage can include:
- Equipment breakdown
- Loss of income
It is not just directly related to accidents. It can help you cover the costs of equipment that might break down during a job or even theft of equipment from a job site. You will be better prepared to deal with these types of issues that can disrupt the operation of your business.
It’s the Law
If you are a contractor in Alberta providing electrical work, HVAC services or general renovation services, it is the law you obtain a minimum of $2,000,000 in a contractor’s general liability insurance policy. You must maintain a valid contractor’s insurance policy as long as you are in business.
Although the idea of feeding into the premiums for such a large policy might seem like a large expense, when compared to what it would cost, if you get taken to court, this is actually quite a modest amount. As well you can face penalties if you operate without insurance, which can also cost money and even ruin your reputation.
Regardless of your area of specialty, insurance is highly recommended for the following services:
- Air Conditioning Installation
- Carpentry Contractor
- Carpentry Shop
- Cement and Concrete Work
- Chimney Cleaning
- Drywall Contractor
- Electrical Contractor
- Excavation Contractor
- Fence and Deck Construction
- Framing Contractor
- Gardening and Landscaping
- General Contractor
- Glazier Operation
- Grading of Land
- Masonry including Bricklaying, Stonework & Stucco
- Metal Doors, Windows, Awning Installation
- Oil and Gas Contractors
- Painting and Decorating
- Plastering and Lathing
- Plumbing, Heating and Air Conditioning
- Refrigeration Contractor
- Roofing Contractor
- Sidewalk Construction
- Sign Manufacturer and Installation
- Solar Energy Installation
- Sunroom, Patio Cover Manufacturer and Installation
- Swimming Pool Installer
- Terrazzo and Tile Work
- Water Softening Equipment Installation
Protect Yourself from the Unexpected
No matter how cautious you are, how many safety protocols you have in place, and how experienced you and your staff are, accidents can happen in the blink of an eye. Although you can make sure you are making your job sites as safe as possible, it is impossible to protect against every eventuality or scenario.
You must cover your bases and have the legally required coverage to protect yourself, your team and your customers. You would never want to imagine an accident injuring someone on your worksite, but there are so many potential hazards that can happen. Your policy will protect you when the unthinkable occurs and maybe even help you avoid bankruptcy.
Risks Associated with Your Specific Services
Although you might think you are safe from accidents, the entire job site you are working on can be at risk for dangers. From equipment left unattended in the driveway for floor installers to the potential for fires started by flammable materials stored at a worksite by painters, you can be liable for a long list of issues.
One of the riskiest contractors is roofers, as they are working on a dangerous surface, a floor or two above the ground. They are not only at risk for falls but also can drop things from the roof that can damage property, cars — or even worse — injure people. Depending on the condition of the building, workers are even in danger of falling through a roof.
Customers Expect It
You might have been lucky and not had any of your customers ask if you have a valid contractor’s insurance policy so far. However, if someone does ask and you can’t present it, it could lead to trouble, the least of which is losing the job.
Your insurance policy is a handy marketing tool that can help put new customers at ease. Without it, you can appear questionable and it might seem like you are trying to hide something. It is always best to follow the rules and provide the right credentials, licenses, and coverage to your clients. From a competition standpoint alone, you want to have insurance, so you don’t miss out on the bidding process.
Financial Loss Protection
You also have to consider damage to your equipment, tools, or materials. Theft of your equipment, or materials you have purchased to complete a job could put you out of work temporarily or even permanently. Without insurance, you won’t have any finances to assist during your recovery.
In addition to loss of your equipment, there may be loss to your reputations if a claim is brought against you and drags through the courts. Whether providing a defense against baseless claims, or negotiating a settlement for injuries caused while you were on the job, your insurance will provide the legal defense costs, as well as the potential millions needed to pay out damages.
As you can see, having insurance is extremely important for your contracting business. Not only is it the law in Alberta for many contractors, but it also provides the funding you need to pay for settlements and judgments. Save yourself the worry of losing your business and invest in a contractor’s insurance policy today.
Coverage is subject to policy wording, terms, conditions, and deductibles. Protection is limited to the perils, coverage, exclusions, and limits shown on the policy.