Construction insurance protects projects, workers, and businesses from financial risks linked to construction. This insurance covers:
Each project type, from high-rise buildings to roads, comes with different hazards. Individuals and organizations must prepare for anything that can delay or halt projects.
In August 2024, a severe hailstorm hit Calgary which caused $2.8 billion in damage. Homes, vehicles, and even the airport were affected. Construction insurance helped businesses and homeowners rebuild and recover.
Construction employs over 1.6 million people in Canada, supporting jobs in engineering, manufacturing, and retail. With so much at stake, strong coverage is needed to safeguard businesses and workers.
Wearable technology and drones are improving safety and efficiency in construction. New regulations require companies to invest in training to prevent accidents and reduce construction insurance costs.
Brokers and insurers now work closely with clients to manage risks at every project stage, but new challenges are emerging:
construction cyber threats: digital tools increase vulnerability to cyberattacks, raising security concerns
material cost volatility: supply chain issues cause price changes, delaying project timelines
extreme weather losses: wildfires and floods in 2024 led to record insurance claims
Labor shortages are also slowing projects and raising costs, making risk management more important. Brokers can help clients find coverage that protects against delays and financial losses.
Course of construction (COC) insurance, or builder's risk insurance, protects buildings and materials during construction or major renovations. It covers fire, theft, and vandalism before the project is finished.
COC insurance lasts only for the project, while other construction insurance covers businesses and workers long-term.
What insurance should contractors have in Ontario?
In Ontario, contractors need certain insurance to work legally. Workers' compensation insurance is required for those with employees. They must register with WSIB and provide coverage for workplace injuries.
Other coverage options include:
commercial general liability (CGL) insurance: this covers third-party injuries and property damage
commercial auto insurance: this construction insurance is required for business vehicles used on job sites and work-related tasks
Yes, this insurance is mandatory for contractors in Ontario. Clients often require proof of coverage before awarding contracts.
Subcontractors are not legally required to have their own insurance, but it is strongly recommended.
General contractors may be held liable for uninsured subcontractors’ mistakes. Many contractors require subcontractors to have their own coverage before working on-site.
Aside from CGL and builder’s risk insurance, contractors need coverage that fits their business risks. Key policies include:
Mobile property insurance is also essential as it covers equipment while moving between job sites. These are some of the coverage options that contractors need.
Contractors should consider these factors when choosing insurance:
An insurance broker can help find the right coverage for each contractor.
The table below shows estimated insurance costs for construction projects in Ontario:
|
Coverage limit / project type |
Estimated cost |
|---|---|
|
$1 - $2 million coverage |
$55 - $67 per month |
|
$5 million coverage |
$100+ per month |
|
New build (6-month project) |
$4,000 - $6,000 total |
Contractors should consult with brokers for accurate quotes.
Contractors can lower construction insurance costs by following safety rules and reducing hazards. Working with an experienced broker and avoiding claims can also help get better rates.
