Why do contractors need insurance

Do not skimp in this category or you might regret it on down the line. Also worth noting is that sometimes project owners, big builders, governing bodies, municipalities, or your city may ask you to present a surety bond in order to bid on tendering jobs in addition to insurance. If this is the case, it would definitely be worth exploring applying for a bonding facility so your business can bid on jobs that are exclusive to bonded companies.

We can help you attain these bonds. Please contact us to learn more. This insurance provides financial protection to property owners, subcontractors, and general contractors during the construction of the project. Below you will learn more on this topic. Legally Required The first thing that any Ontario contractor needs to know is that there are certain policies that are required by the law. Understanding Workers Compensation If you are a successful contractor in the Ontario area there are going to be ample opportunities to take on more and more projects.

Bonded jobs Also worth noting is that sometimes project owners, big builders, governing bodies, municipalities, or your city may ask you to present a surety bond in order to bid on tendering jobs in addition to insurance. Other frequently asked questions before buying contractors insurance Do I Need Contractors Insurance to be able to work in Ontario? What Is Contractors Liability Insurance? Do I need insurance even if I am an Independent Contractor?

Why not get a free quote? Close this module. Takes less than 30 seconds. Compare multiple insurance companies at once. According to the IRS , independent contractors are:. It is important to clarify your role, particularly if you work for the same clients again and again.

Your legal standing will determine what insurance you need. An employee does not need to carry their own liability insurance, but a true independent contractor does. Some typical insurance coverage options for independent contractors are as follows:. While every independent contractor will not need every type of insurance listed here, learning more about the different types of coverage and what they do can help you make the best possible decisions for your business.

Your needs may also change over time, so having a good idea of what is available and what kind of risks you could face can help you to protect your business as it grows.

Do Independent Contractors Need Insurance? What about a Business Owners Policy? Employee vs. While individual policies vary, a liability policy will usually cover the following types of situations: Bodily injury caused to someone else who is not your employee Slip and fall accidents Copyright infringement Product liability Slander and libel Property damage.

What Is Errors and Omissions Insurance? Errors and Omissions Insurance in Action. In general, the following types of contractors need some type of insurance to protect themselves, to work legally in some locations, and to give clients peace of mind: Construction contractors of all types Plumbers, electricians, carpenters, and painters Handymen and repair contractors Home, business, and carpet cleaners Artists including graphic designers, product designers, writers, and more Dog walkers, groomers, trainers, and sitters Other animal trainers.

Risks Faced by Independent Contractors without Insurance. What happens if you do not have insurance? Benefits of Insurance for Independent Contractors. In addition to that important peace of mind, insurance coverage provides the following benefits to independent contractors: Financial security — One accident or lawsuit will not take away your business and years of hard work.

The cost of a lawsuit can quickly make it impossible for you to continue buying inventory or performing work. Insurance allows you to continue working even during a lawsuit. Covers the costs of your legal defense — Even if you win a lawsuit you will still have to pay legal fees, unless you have insurance to cover them.

You may be faced with extensive legal fees when you are called to defend yourself in court. If you lose, you will also have to pay for any damages, unless you have insurance. Allows you to avoid bankruptcy if you are sued — Whether you are at fault or not, a lawsuit could derail your business.

You may end up facing bankruptcy after a single lawsuit, leaving you with no way to continue running your business. Liability insurance helps you to avoid bankruptcy and continue operating as usual. Ensures you meet requirements — Having insurance means you are able to work in states that call for mandatory insurance for contractors or for those working on job sites. In some locations, you may not be able to legally work if you do not have the proper insurance coverage.

Makes it easy for a client to hire you with confidence — When you are insured, your clients not only know that they are protected in the event of an accident, but they also know you care enough about your work and business to truly be prepared for any eventuality. Makes it easy for another business or contractor to hire you, worry free — If you are a subcontractor and wish to get projects or jobs from a general contractor or other business, you need to be able to demonstrate that hiring you will not expose them to additional risk.

While you can be covered under their policy, arriving with your own policy saves them time, money, and hassle. Can an Independent Contractor Really be Sued? Liability insurance It could be something as small as a crack on the floor tiles or as costly as flooding your house. Liability insurance covers: Damage Claims —The insurance covers the cost of repair for damages caused by the contractor while doing work on your property.

Job Completion Claims — In case the contractor fails to meet expected standards, the insurance will shoulder, in part or full, the cost of fixing the mistakes. A word to the wise Construction site accidents are not new. Topics: Site management. Hand-picked related articles. We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. Do not sell my personal information.

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