Coverage for Independent Contractors Under Your Company Insurance

Does my company’s insurance cover independent contractors?

As a business owner or entrepreneur, you understand how important it is to have the right insurance to protect the assets and operations of your firm. But what about any self-employed people you could be working with? Do you need to take care of them on your own, or are they covered by your current coverage? Companies all across Canada are finding that this is an increasingly significant subject as the number of independent specialists and the gig economy rise.

This comprehensive book will explore the intricacies of business insurance in Canada, focusing on the consequences for independent contractors. We will discuss the many types of insurance coverage that are available, along with the specific requirements and restrictions that may apply to your business.

Let’s talk about business insurance now, what it means for independent contractors, and what you can do to ensure that you and your partners are properly covered in today’s fast-paced business world.

What separates company insurance from contractor’s insurance?

Contractor’s insurance and business insurance are two types of liability insurance that give businesses financial stability, but they differ significantly in a few key ways.

Business insurance is a type of insurance that protects organizations against a range of risks and liabilities, such as operational disruptions and property for property damage. Business interruption insurance, property insurance, commercial general liability, and other coverage types meant to protect businesses from a variety of unanticipated events and risks are frequently against hiccups in company.

On the other hand, contractor’s insurance is a specific type of liability coverage meant to handle the risks associated with contractor activities. Contractor’s insurance often includes coverages for professional liability, commercial general liability, and other risks specific to the construction industry. In the case of a liability claim pertaining to property damage, personal injury, or other hazards arising from physical harmonization activity, contractors may find this coverage advantageous.

As a result, while both offer protection for businesses, business insurance provides better coverage for a wider range of risks and liabilities related to the firm, whereas contractor’s insurance is specifically tailored to handle the risks and liabilities associated with contractors. If you have any more questions concerning contractors or business insurance, please contact us right away!

What is covered by general liability insurance for contractors?

General liability insurance for contractors, also referred to as contractors insurance, is a type of comprehensive coverage that protects against claims of bodily harm, property damage, and other potential risks that may arise from the contractor’s business operations. This insurance is meant to help contractors lower the financial risks associated with accidents, injuries, or property damage they may experience while performing their jobs.

The following types of claims are often covered by general liability insurance for contractors:

Physical harm

This coverage provides insurance in the event that someone is harmed while doing business or working for the contractor. For example, if a customer trips and falls on a wet floor while on the contractor’s site, the accompanying medical expenses and attorney fees may be covered by the contractor’s general liability insurance.

property harm

This coverage will protect the contractor in the event that they cause damage to someone else’s property while doing their duties. For example, if a contractor accidentally destroys a customer’s property while working on a building project, their general liability insurance may cover the expenses of replacement or repair.

Advertising and injury to oneself

This insurance shields against lawsuits for libel, slander, and copyright infringement resulting from the contractor’s advertisements or ads.

Since general liability insurance policies for contractors typically contain limitations and exclusions, it is imperative that you thoroughly review the terms and conditions of the policy to ascertain what is and is not covered. Additionally, contractors might wish to consider supplemental coverage, such as professional liability insurance or protection against cyber liability, based on the specific risks associated with their line of work.

Do independent contractors fall within the umbrella of my firm general liability insurance?

Generally speaking, independent contractors are not instantly covered by your commercial general liability insurance (CGL) policy because they are considered separate legal entities from your company. However, some of the work performed by independent contractors on your behalf may be covered by the terms and circumstances of your policy.

For example, if an independent contractor works on a project for your business and causes property damage or injuries to people, your CGL coverage can cover the costs of any claims or lawsuits that result. The contractor may need to have the necessary insurance and license in order to be eligible for coverage under your policy, and this coverage may be limited to particular circumstances.

To fully understand the specific limitations and coverage that apply to independent contractors, it is imperative that you carefully review the terms and conditions of your liability insurance policy. If you work with independent contractors on a regular basis, you might want to consider adding a rider or endorsement to your policy that specifically covers their actions when they represent you.

Does a contractor need insurance in Ontario?

In Ontario, contractors are not required by law to have insurance. However, many clients and project owners would require contractors to carry insurance in order to do business. Purchasing insurance may also protect your business from unanticipated liabilities and hazards.

Thus, it’s important to consider the risks and responsibilities involved with running a business even if it’s not legally required for contractors in Ontario to obtain insurance. Having insurance can protect your business and give you peace of mind in case of unanticipated events.

Why is insurance for contractors required?

It is highly recommended that Canadian contractors acquire contractor insurance to protect both themselves and their business from a range of risks and obligations. Contractor insurance could shield your business against future monetary losses and legal issues.

Below, we’ve listed the top four reasons to consider getting contractor insurance:

protection from accidents and injuries

Accidents and injuries (including slip-and-fall events or injuries from falling debris) that occur on the construction site may be covered by contractor insurance. In the event that an individual sustains injuries as a result of the contractor’s work, the contractor can face consequences. Having this coverage can help you save a lot of money on future medical costs and legal bills.

protection against damage to property

If the contractor inadvertently damages someone else’s property while performing work, they might be held liable for the cost of replacement or repairs. Contractor insurance could help cover the costs.

protection from court claims

In the event that a client or other third party files a lawsuit against you for damages or injuries, contractor insurance may pay for the costs of defense, settlements, and verdicts.

meeting the requirements of the agreement

In order to do business, clients and project managers frequently require contractors to carry insurance. Having contractor insurance may make it easier to meet these requirements and get more contracts.

Contractor insurance is available in Canada in a number of forms, including general liability, business auto, and professional liability. The type of insurance you need depends on the specific dangers you face and your commercial auto insuranceization. By getting contractor insurance, you can secure your business and rest easy knowing that you are covered in the event of unanticipated events.

How much does contractor’s insurance cost in Ontario?

A contractor’s size, type of work, and required coverage amount are just a few of the factors that can have a big impact on how much contractor insurance costs in Ontario. Generally speaking, the type and extent of coverage needed will dictate the cost of contractor’s insurance.

A few factors that could influence the actual cost are the degree of risk involved in the task, the number of employees, the size of the business, and the deductible.

The firm’s location, its track record of filing claims, and the types of coverage selected are further factors that could affect the price of contractor’s insurance.

Get in touch with us right now to speak with a licensed insurance broker who can help assess your company’s needs and provide a customized insurance quote in order to obtain a more precise estimate of the cost of contractor’s insurance in Ontario. Find out more about the kinds of business insurance quote data that you will require to receive a precise quote.

Do independent contractors and general contractors need different insurance?

Independent contractors and general contractors may require different kinds of insurance, depending on the nature of their work and the specific risks they face. Both types of contractors may need general liability insurance and other comparable types of coverage, but the terms of the policy may differ.

Typically, general contractors oversee and manage construction projects in addition to hiring and supervising subcontractors. Consequently, they can require additional insurance, such builder’s risk insurance, which safeguards the building project itself. In order to cover the additional risks associated with managing a building project, general contractors may additionally need to carry higher coverage limits.

Independent contractors, on the other hand, typically work on specific assignments or projects and might not require as much insurance. Nonetheless, individuals can still require insurance coverage for risks like property damage and liability claims, depending on the specifics of their line of work.

As a result, while both would require similar types of insurance coverage, the specific risks and duties associated with each of their separate sectors of employment may necessitate different types and amounts of coverage.

How do the insurance coverage of my subcontractors’ contractors work?

Subcontractor coverage is determined by your policy type and the specific terms and conditions of your contractor’s insurance policy.

Subcontractors are generally not covered by your contractor’s insurance coverage since they are considered independent businesses and your policy typically only covers full-time employees. However, such rules may only cover a portion of what applies to subcontractors working under your control, subject to certain restrictions.

For example, if you have general liability insurance, your policy may cover injuries to third parties or property damage brought on by your subcontractors while they are working on your behalf. However, this insurance might only be available if the subcontractor possesses the necessary license and insurance, and it might only cover a specified amount.

Alternatively, you can add a rider or endorsement to your policy that specifically covers your subcontractors. This endorsement may provide additional protection for the subcontractors and their work.

It is vital that contractors comprehend that the insurance coverage restriction pertains to all employees of their organization, not just specific employees. To better serve all workers, contractors may choose to increase the limit of their coverage.

However, if they use subcontractors who have their own liability insurance, it ensures that everyone is adequately covered. Subcontractors may consider obtaining their own liability insurance to guarantee coverage, even in the event that their employer is unable to provide it. Furthermore, subcontractors may have liability insurance and operate on multiple sites.

Make immediate contact with us if you have any questions or concerns regarding insurance. We can help you understand your options for coverage and choose the best insurance to meet the needs of your business.

More choices for contractors seeking business insurance

Contractors may require supplementary insurance in addition to general liability insurance, depending on the specific risks they face and the nature of their business. Examples of such insurance include:

Professional liability insurance, often known as errors and omissions insurance

The purpose of this insurance is to protect contractors from legal action brought about by mistakes, neglect, or irresponsibility in providing expert services. It should be especially relevant to professionals who supply clients with specialized services or expert advice, such as consultants, designers, engineers, and other service providers.


The purpose of builder’s risk insurance is to shield contractors against financial losses or harm brought on by theft, vandalism, natural catastrophes, and fires that happen during the construction of a project. With this coverage helping to guard against financial losses and legal issues, contractors can focus on completing the task and delivering it to the customer on time and under budget.

Commercial auto insurance

Companies may be covered by commercial auto insurance for mishaps, theft, or damage to a vehicle used by an independent contractor for business purposes. This is especially important for contractors who frequently transport tools, equipment, or clients in their cars.

Commercial property insurance

This insurance guards against hazards including fire, theft, and natural disasters for the contractor’s equipment, supplies, and workspace. It is particularly important for contractors who own expensive equipment or have a distinct workspace, such a home office or studio.

Insurance against cyber liability

An independent contractor who handles sensitive client data or whose firm primarily relies on technology may be protected financially from data breaches, cyberattacks, and other cyber-related incidents by cyber liability insurance.

Insurance against business interruption

If the contractor depends on the proceeds from their business to support themselves, they may wish to consider business interruption insurance. This coverage may offer financial assistance in the event of unforeseen events, like a fire or natural disaster, that necessitate a temporary suspension of their business operations.

Be advised that certain clients may require contractors to maintain a specific amount of insurance coverage in their contract. It’s imperative that you carefully review your contracts to ensure compliance with all applicable insurance requirements. Furthermore, depending on their particular circumstances, an independent contractor’s individual insurance obligations may vary.

Which type of contractor needs general liability insurance?

Most contractors require general liability insurance or contractor insurance to protect themselves against numerous risks and liabilities that may arise from their work. Here are a couple such examples:


For protection against liability claims related to property damage, bodily injury, and other risks associated with their line of work, general contractors, subcontractors, and specialty contractors are typically obliged to have general liability insurance.

landscape contractors

For protection against liability claims related to property damage, injury to third parties, and other risks associated with landscaping operations, general liability insurance is typically necessary for landscaping contractors, which includes lawn care, tree care, and irrigation providers.

contractors in charge of cleaning

General liability insurance is typically necessary for cleaning contractors, including janitorial services and commercial cleaning companies, to safeguard themselves against tort claims pertaining to property damage, bodily injury, and other risks associated with cleaning operations.

contractors for home renovation

Home improvement contractors frequently need general liability insurance to guard against liability claims due to property damage, bodily injury, and other risks associated with home improvement work. This is especially true for contractors who offer remodelling, remodeling, or repair services.

advising independent contractors

General liability insurance is typically required by consulting contractors, such as management, IT, and marketing consultants, to shield them from liability claims pertaining to professional misconduct, errors or omissions, and other risks associated with consulting work.

How can one hold an independent contractor accountable?

Depending on the specifics of the situation and the nature of their work, an independent contractor could face a variety of consequences. You can view a few of these instances below:

Property damage or bodily harm

Contractors may be liable for damages if they cause property damage or bodily harm to third parties while carrying out their work. For instance, a painter may be liable for the expense of repairs or replacement if they mistakenly spill paint on a customer’s carpet and cause damage.

Violation of the agreement

If the contractor breaks the terms of their contract with a customer or partner, they could be held liable for damages. For example, if a contractor fails to complete a task within budget or on time, they may be liable for any financial damages.

Negligence or professional misconduct

If the contractor does their work without exercising reasonable care or competence, they may be held liable for any damages. For example, if an accountant makes a mistake on a client’s tax return that results in penalties or fines, they might be held liable for damages.

Disobeying the law or the rules

If the contractor disobeys any laws or ordinances related to their work, they could face fines or other consequences. For example, failing to obtain the necessary licenses for a project could result in fines or other penalties for a building contractor.

Sickness or injury at work

If the contractor hires workers, such workers might be held responsible for any illnesses or injuries they get on the job.

Generally speaking, there are a number of ways independent contractors might be held accountable, and the specific risks and obligations they face will change based on the specifics of their work and the way their business is run. Independent contractors need to obtain the right insurance coverage and take safety measures against risks and liabilities to protect themselves and their businesses.

To learn more about whether your company’s insurance covers independent contractors, get in contact.

Although business insurance policies may provide coverage for a variety of risks and obligations, it is essential to understand the specific conditions of the policy in order to determine whether your independent contractors are adequately protected. limited acts may occasionally be covered by your insurance, but only in limited situations.

If you frequently work with independent contractors, it’s important to carefully review your policy and consider adding an endorsement or rider to cover their conduct while acting on your behalf. You can protect your business against unanticipated events and liabilities by making the time to understand your insurance policy and working with a seasoned insurance professional who is familiar with your industry.

Our staff of insurance experts at can help you comprehend the coverage of your policy and offer suggestions on how to ensure that your independent contractors are covered by your business insurance policy.

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