3 common small business claims

Male business owner reviewing delivery list on laptop
3 minute read  

Owning your own construction and contracting business is an exciting career path. Those who choose it get to work with their hands, be their own boss and help customers bring their dream homes or work spaces to life. And while we encourage the contracting-inclined to follow their dreams, we’d also like to help prepare you for some of the risks you may face. Whether you own your own business or sub-contract for larger companies, there are a number of risks you should pay attention to in order to protect your bottom line. Having proper safety training, risk management procedures and loss prevention programs can help, but having the right insurance protection is also important. Here are some of the risks you need to be aware of.

Three common risks contractors face

Liability risk

As a contractor, you’re used to working in environments that aren’t always the safest. Whether you’re breaking down walls, doing electrical work or tiling floors, you may be vulnerable to a number of liability risks including injuries to yourself, your coworkers, your customers and their property. An honest mistake or oversight, no matter how small, could have a big impact on your customers’ property or cause an injury to someone on your jobsite.

Whether you’re hired directly by a customer, or working as a subcontractor for a larger company, you could be held responsible if something goes wrong, which may lead to a costly lawsuit. Commercial General Liability (CGL) insurance for contractors can help protect you and your business from financial consequences if this type of situation occurs. Completed Operations coverage is another type of insurance contractors should consider. It can help protect you if covered damage is caused after a job is completed. If you work with independent contractors on occasion, it’s important to remember that your CGL coverage may not cover their work. As a small business owner, you should always ask the independent contractors you work with to provide proof of insurance to ensure they’re also protected from liability costs.

Property risk

We have no doubt that when you’re not busy working on a job site, or travelling in between jobs, your tools and equipment are safely stored away—but what if there was a flood, or a fire? Any number of things could happen that may damage the tools you rely on to get a job done. It’s important to make sure that both your property and your equipment are properly insured to help keep your repair or replacement costs down.

As a contractor, commercial property insurance and business interruption insurance are two very important types of coverages to consider. Commercial property will help protect your shop, its contents and its supplies if they get damaged by an insured peril. Business interruption insurance can offer protection against loss of income due to a claim and help cover expenses if your business is unable to maintain normal operations due to an insured loss. For example, if a flood takes place in your shop causing significant damage to all of your electrical equipment, this type of coverage can help relieve some of your lost income while you repair or replace it. If you need to temporarily relocate, business interruption insurance can help with those costs as well.


Construction site theft is an ongoing issue. News stories, arrests and warnings on this topic pop up daily throughout Canada. And while we’re sure you take every precaution to ensure your tools are safely stored, clearly marked and properly secured, some things are out of your control. Not every job site is the same, and security measures vary across the board so it’s difficult to know what you’re dealing with. Contractor tools are popular targets for theft because they’re often left unattended and can be easily re-sold on the black market. Other frequent targets for thieves include appliances, supplies and copper wiring. It’s important that as a business owner you properly prepare yourself for the expensive cost of repairing or possibly replacing your crucial equipment if it gets stolen. The right insurance policy can help cover some of the costs associated with theft and may even reimburse you for the cost of renting tools in the meantime.

Protect your bottom line

Insurance is about more than just protecting your business from loss—it’s about providing yourself, your current customers and your future customers with peace of mind. Having adequate insurance coverage can help protect your finances when you’re faced with an unexpected loss. Having proof of insurance coverage will let your customers know you’re a professional who can be trusted to get the job done right.

Homestars is a great tool for connecting homeowners with experienced and trustworthy contractors. This free service helps customers find reputable renovators, repairmen and retailers by searching its database of 2 million companies and hundreds of thousands of reviews. If you’re a contractor looking to grow your business, joining the Homestars community might be the right fit for you.

This blog is provided for information only and is not a substitute for professional advice. We make no representations or warranties regarding the accuracy or completeness of the information and will not be responsible for any loss arising out of reliance on the information. Terms, conditions and exclusions apply to coverage, see policy for details.