Most contractors worry about theft, a broken tool, or a repair bill.
The real damage usually starts after the incident. A liability claim turns into legal fees. A project delay triggers penalties. A certificate gets rejected and you lose the bid. The result is financial losses that hit cash flow, backlog, and your ability to grow.
If you are a business owner in Ontario construction, the goal is not just to “have insurance.” It is to build insurance protection that matches your contracts and your business operations across Ontario and Canada.
This guide focuses on commercial general liability insurance, coverage limits, builders risk coordination, auto insurance, and the contract clauses that decide whether you are protected when someone alleges bodily injury or property damage.
Who this is for
This is written for business owners, contractors, and subcontractors who work in:
Toronto and the GTA
Hamilton, Kitchener Waterloo, London, Ottawa
Commercial and institutional projects across Ontario
Canada wide projects where owners use standardized contract terms
If you bid public work, work under a large GC, or touch high value properties, you are operating in a high severity environment where one incident can create a large liability claim.
Why the biggest losses are not the incident. They are the downstream costs.
A single injury or damaged surface can become a claim file that runs for months. The money leaves your business in predictable places:
Legal costs and legal fees to defend the claim
Project delays and contract disputes
Back charges and scope arguments
Replacement labour and expediting costs
Lost bids because your certificates do not match owner wording
Higher premiums and tighter terms at renewal
This is why risk assessment matters. Construction insurance is not only about paying for losses or damages. It is about keeping your business operations stable when the job goes sideways.
The four contract issues that quietly void your protection
1. Wrap up liability: you think you are covered, until you are not
Many Ontario construction contracts require wrap up liability coverage. Owners and GCs like wrap up because it standardizes protection on a project. Contractors assume that means they can lean less on their own commercial general liability insurance.
That is where problems start.
Wrap up is project specific. It can have exclusions. It can have enrollment rules. It can have timing issues. It may not respond the way you expect if the alleged bodily injury or property damage happens outside the defined project scope, or if your operations change mid project.
What to do:
Request the wrap up summary before you sign
Confirm who is enrolled and when coverage starts and ends
Confirm what operations are excluded, including specialty work and off site work
Ensure your own commercial general liability CGL is aligned to the contract and does not conflict with wrap up terms
Confirm your certificate wording matches the owner template
High intent check: If an owner asks tomorrow for proof of wrap up enrollment and your coverage limit, could you respond in one email with clarity and confidence?
2. Builders risk and course of construction: gaps happen in transit and storage
Builder’s risk policies are often purchased at the project level. In Ontario, the owner may buy it. The GC may buy it. Some contracts push responsibility to the contractor for materials, work in progress, and temporary works.
The highest frequency gap is not “no builder’s risk.” It is mismatched responsibility. When a loss happens, everyone points to someone else.
Common gap zones:
Materials in transit
Off site storage
Work in progress before acceptance
Temporary works, site setup, and scaffolding type exposures
Soft costs tied to delays and rework
Contractor supplied components for a product or service that is custom and high value
What to do:
Clarify who is responsible for materials at each stage
Confirm whether off site storage and transit are included
Coordinate builder’s risk with your own inland marine and tools coverage
Confirm who will cover the costs of cleanup, expediting, and temporary protection after an event
3. Permits and code compliance: a claims dispute is where paperwork becomes expensive
Municipal permitting and provincial building code compliance are not just administrative. If there is a major loss, insurers and lawyers will examine compliance as part of the file.
Non compliance can complicate coverage analysis and can increase legal costs. It also weakens your defence when an owner alleges negligence.
What to do:
Keep permit records and inspection sign offs organized
Maintain version control on drawings and approved changes
Use written change orders, not verbal work orders
Treat documentation as a defence asset, not paperwork
4. Indemnity and hold harmless clauses: the contract can transfer a type of liability you did not price for
Construction contracts often include indemnity and hold harmless wording that can expand your obligations beyond what you think you are buying.
This is where contractors accept a type of liability that turns into uninsured exposure if your policy does not respond the way the contract reads.
Key contract to policy alignment points:
Contractual liability wording in your CGL
Additional insured requirements and correct entity naming
Cross liability and severability provisions
Subcontractor compliance process, including limits and endorsements
What to do:
Review indemnity clauses before signing
Make sure your insurance broker confirms your contractual liability fits the obligation
Enforce subcontractor certificates and endorsements consistently
Do not let a subcontractor start until their insurance meets the contract requirements
Commercial general liability insurance in Ontario: what it should actually do
Commercial general liability insurance, often referred to as commercial general liability CGL, is the foundation of insurance protection for contractors. It is designed to respond when your business operations cause bodily injury or property damage to third parties, subject to terms and exclusions.
A good CGL program should be built for:
The size of your contracts
The property values you work around
The likelihood of a liability claim with high legal fees
Your completed operations exposure after turnover
This is not theoretical. One serious bodily injury or property damage allegation can generate legal fees that are significant even before settlement discussions start.
Completed operations: the exposure that follows you for years
A lot of contractors buy limits based on today’s job site risk. Completed operations is different.
Completed operations exposure involves claims that arise after work is finished. Defect allegations, water damage, envelope issues, or failure of a product or service can show up long after turnover. This is where long tail exposure lives, and where limits must be realistic.
What business owners should do:
Size limits to the largest job you want to win, not the smallest job you do
Assume a claim can arise years later
Use an umbrella if contract limits exceed your base CGL
Ask your insurance broker how completed operations is treated in your wording and what exclusions apply
Auto insurance: fleet use has to match how you actually operate
Auto insurance is another common source of surprises. Contractors often have vehicles hauling equipment, towing trailers, and accessing tight job sites. If the policy is not structured for actual use, claims become messy.
What to check:
Vehicle classification matches contractor use
Trailer and towing exposure is correctly addressed
Radius reflects real travel
Driver eligibility and onboarding process is documented
Limits match owner requirements and contract standards
If you have a fleet, risk assessment should include driver controls and incident reporting discipline. Those reduce financial losses over time.
Coverage limits: how to choose without guessing
A coverage limit is not chosen by habit. It is chosen by severity.
Use this process:
Start with the biggest contract requirement you need to satisfy
Overlay the property values and injury severity potential on your typical sites
Consider the legal costs of defending a liability claim in Canada
Account for completed operations exposure
Match deductibles to cash flow so you can cover the costs of a loss without financing stress
If your limits are based on what you carried two years ago, you are underwriting your own business by accident.
The underwriting steps that improve terms and reduce legal cost friction
Insurers reward predictable operators. These steps reduce uncertainty and reduce premium shocks:
Document safety training and toolbox talks with attendance
Maintain equipment and fleet maintenance logs
Use site security controls to prevent injury or damaged equipment incidents and theft
Report incidents fast with photos and written notes
Standardize subcontractor insurance compliance and keep certificates organized
Keep a clean backlog schedule and job costing process
This is not busy work. This is how you keep insurance protection strong and renewals stable.
FAQ
Does a wrap up policy replace my commercial general liability insurance?
No. Wrap up is project specific. Your CGL supports your broader business operations and your completed operations exposure.
Do I need builder’s risk if the owner has it?
Sometimes. It depends on who is responsible for materials, work in progress, off site storage, and transit. The job is to avoid gaps, not rely on labels.
Why do owners require higher coverage limits than I want to buy?
Owners are protecting their project and balance sheet. Higher limits reflect the potential severity of bodily injury or property damage on high value sites, plus the legal fees required to defend claims.
What should I send to an insurance broker to get a proper review?
A sample contract, your certificate requirements, your current policies, your fleet list for auto insurance, and a summary of your largest projects.
Talk to Boardwalk
If you want to win better projects in Ontario and across Canada, your insurance should be contract ready.
Send us one of your contracts and the insurance requirements page. We will do a quick risk assessment, confirm where your commercial general liability insurance and auto insurance match the requirements, and flag the gaps that could trigger financial losses, legal fees, and rejected bids.
