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When pricing out contractor insurance for your business, it’s easy to get overwhelmed. From different types of coverage to various warranties and conditions and multiple insurance carriers, it’s hard to know if you’re receiving the best value.
Saving money on contractor insurance involves a strategic approach that balances cost-efficiency with providing the protection necessary to cover your business from financial hardship if an unexpected event happens.
In this post, we will look at six easy-to-implement ideas that will help you save money when sourcing general contractor insurance in Ontario. But first, let’s explore the types of insurance contractors may need.
What Insurance Should Contractors Have in Ontario?
When it comes to contractor insurance, a business may need various coverages. Here is a list of the most common insurance general contractor businesses carry in Ontario.
- Commercial General Liability Insurance - Covers the costs (legal and damages) associated with a third-party claim of bodily injury or property damage.
- Tools and Equipment Insurance - Provides reimbursement for repairing or replacing damaged, lost, or stolen tools or equipment.
- Environmental Liability Insurance - Protects a contractor's business from financial losses from a pollution incident.
- Builders Risk Insurance - Coverage for risks such as fire, vandalism, theft, or natural disasters when a building or structure is under construction.
- Commercial Auto Insurance - Protects vehicles used for business purposes
- Cyber Liability Insurance - Coverage for financial losses and liabilities from cyber attacks and data breaches.
6 Tips to Save Money on Contractor Insurance
Contractor insurance is critical to protecting your business. The key is to do it in a way that mitigates risks cost-effectively. Here are our six tips to save money on contractor insurance in Ontario without giving up essential coverage.
- Don’t skip the annual review
- Report the right gross revenue
- Update on changes in operations
- Correct outdated locations
- Follow proper risk management
- Consult with an expert
Don’t Skip The Annual Review
While it may not be at the top of your priority list when running a contractor business, meeting with your broker can save you money on your insurance. That’s why our first tip is don’t skip your annual insurance review.
During this meeting, your insurance broker will ask you questions regarding your business to evaluate your current coverage and see if your policy needs to be changed. Through their experience, they understand ways to save clients money while keeping adequate coverage.
Report The Right Gross Revenue
The gross revenue of your contractor business is one of the factors that determines the amount of your policy. At the start of the year, you likely projected what your gross revenue was going to be. If that has fluctuated and you didn’t contact your broker, you could be paying more on your contractor insurance than you should be.
Update On Changes In Operations
Have your business operations changed recently? Areas such as who is doing the work, the volume of work, or the projects you are working on? If so, you can likely save on your current contractor insurance policy.
Keeping your broker up-to-date on changes in your operations, even if you think they’re insignificant, can be a way to lower the cost of your contractor insurance.
Correct Outdated Locations
In the busyness of overseeing multiple construction projects, an oversight that happens more frequently than you would imagine is not updating your policy with buildings you no longer own.
While this may feel like a no-brainer, too often in conversation with clients, they have outdated information on their insurance policy, including building ownership, that they’re still paying for unnecessarily.
Follow Proper Risk Management
It’s no shock that there is a correlation between the frequency and magnitude of claims and the cost of contractor insurance. That’s why our fifth tip is to follow proper risk management practices.
Putting into practice such things as collecting certificates of liability from subcontractors, making sure there is proper fencing on construction sites, and proper storage of toxic materials, to name a few, will help you reduce your chances of a claim and, in turn, keep your contractor insurance rates low.
Consult With An Expert
In the first five tips, while there is an onus on the general contractor to save money on their insurance, a good broker will reach out to ensure the coverage you have today is what you need for your business's current operation. In addition, they can be a wealth of knowledge on different risk mitigation suggestions.
Consulting with the right broker can be the most significant cost savings on your contractor insurance. Through their experience working with clients like you, they know the right questions to ask, the coverage you need (and what you don’t), and have a network of insurers with whom they’ve built strong relationships, enabling them to be master negotiators on your behalf.
Next Steps: Reduce Your Contractor Insurance Costs with the Help of Buildsure
Getting contractor insurance shouldn’t be so complicated and time-consuming. At Buildsure, we simplify the process of getting the coverage you need by connecting you with a broker who is an expert in construction insurance. They have the knowledge and experience to ensure you have the right coverage at a cost-effective price.
