Contractor Insurance in Canada: What Coverage You Actually Need
General liability, tools and equipment, commercial vehicle, workers' compensation and more: a plain-language guide to insurance for Canadian contractors.
This is general information, not insurance or legal advice. Requirements differ by province, trade and client, so confirm details with a licensed broker. But every Canadian contractor should understand the main types of coverage, because clients, general contractors and property managers increasingly ask for proof of insurance before you start.
Commercial general liability (CGL)
CGL covers third-party injury and property damage caused by your work, such as a water leak damaging a client's floor. Many clients and general contractors require limits of $2 million, and commonly ask to be named as an additional insured. It is the baseline policy for most trades.
Tools and equipment coverage
Tools are expensive and are a frequent theft target. Standard CGL does not cover them. Tools and equipment coverage handles theft, damage and loss, including from vehicles and job sites.
Commercial vehicle insurance
Using a personal auto policy for business driving can create a denied claim. If you drive to job sites with tools and materials, ask your broker whether you need commercial coverage.
Workers' compensation (WSIB, WorkSafeBC, CNESST and others)
Provincial workers' compensation boards cover workplace injuries, and in many provinces it is mandatory for construction firms with employees, and sometimes for subcontractors. Penalties and unexpected assessments for being unregistered can be steep. Check your provincial board.
Professional liability / errors and omissions
If you design, inspect or advise, such as building consultants and some renovation firms, professional liability covers claims that your advice or design caused a loss.
Builder's risk, surety bonds and others
Larger projects may require builder's risk, performance bonds or bid bonds. Ask early when bidding on commercial or public work.
Show proof on your quotes
Including "Fully insured and licensed" along with your licence number and insurer on a quote reassures homeowners and speeds up approval on commercial jobs. It also helps justify a price above the cheapest bid. See how to write a professional quote for where credentials fit.
Budget it as overhead
Insurance, vehicle costs and tools are part of your overhead and must be recovered in your pricing. If you are unsure how, read how to price a job.