The Essential Elements of Contractor’s Insurance
If you’ve ever been involved in a building project you’ll know just how important it is to have contractor's insurance. Whether you are having a leak fixed in the roof, or adding a new guest bedroom, there is a list of things that can go wrong during any home construction project.In 2018, the net claims incurred by liability insurance in Canada were more than $3 billion. Public liability insurance is important, not only to assist in the event of injuries, but also to cover legal costs for yourself or others in the event of an accident or property damage.
What is Contractors Insurance?
A contractor’s insurance policy is appropriate for most construction projects. It includes cover for private houses, cluster homes and small blocks of flats, and up to large projects such as shopping centres and power stations. This type of insurance specifically caters for a specific insurance market with unique insurance requirements.
Policy Cover
With all risk cover, your policy will typically provide over for construction works that are damaged as a result of fire, landslips, earthquakes, storms, theft and malicious actions. As with most insurance policies, contractor’s insurance will have some limitations, even though it is classified as all risk. That’s why it’s important to discuss your needs with your insurance provider to make sure that you get the cover you need.
Premiums
As a contractor, you will likely buy insurance every year to cover the work you will be doing throughout the year. So the premiums will vary based on your annual turnover, keeping in mind the excel level and policy limits required. Insurance can also be bought on a short-term basis, which is good if you only need cover for a single project.
What Should Homeowners Consider?
When you commission a maintenance or construction project for your home, you may forget to check the insurance status of the contractor you work with. This could lead to significant financial losses, should something go wrong. So if you are planning a renovation or a rebuild, it’s important to make sure the contractor you use is fully insured for:
- Contract works – This will cover the contractor for any sudden or unforeseen physical damage or loss caused to your property, other than those specifically excluded.
- Public liability insurance – This will cover your contractor for any legal liability due to damage to the property of others, or injury to a member of the public while working.
When you want to start a renovation project at home, always discuss your requirements with your contractor first, and share any concerns you may have. They can then inform you if they are covered for specific events, and also help you check to see if your home insurance policy will cover the building project. In some cases, you may need to pay higher insurance premiums, depending on the work being done.