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Mackay Insurance Blog

 

October 2018

Contractor Insurance: If You Donít Have It, You Need It. Hereís Why!

new home under construction

If you own a home or a car, chances are good you have purchased some type of insurance policy to protect you from loss, theft or damage.

So it just makes good sense that you would want to put the same protection in place for your business! While the self-employment sector of the Canadian workforce continues to grow larger each year, this type of smaller business is also more vulnerable to setbacks ranging from theft or vandalism to natural disaster, lawsuits and personal setbacks.

Contractor insurance is a type of insurance product specifically designed and uniquely well-equipped to help your business handle the inevitable ups and downs of working as an independent contractor. In this post, learn what you need to know about contractor insurance, including how much you need and how to apply.

Mandatory Insurance Coverage for Contractors

Here in Ontario, you are required to register your independent construction company with the Workplace Safety and Insurance Board (WSIB) and retain certain mandatory insurance coverages.

This mandate extends to contracting businesses from very small to very large.

Not surprisingly, wading through the complex assortment of laws and regulations regarding contractor insurance can be a full-time job. After you get done sorting out which insurance policies you need, what they cover and what is still missing, then it is time to tackle tax accounting requirements, mandatory worker training, licenses, certificates and day-to-day business management.

This explains why so many independent contractors often feel like they are working themselves to death and still not getting ahead!

We want to make contractor insurance easy to understand and acquire so you can get back to your real job—managing and growing your business.

What Type of Contractor Insurance Do You Need?

Regardless of how small or large your company size is, you will need the same basic types of insurance protection.

Completed operations

Completed operations insurance protects contractors from client lawsuits that may occur months or years after the job is completed.

Customer disputes

Even a single dispute that evolves into a lawsuit can topple a small independent contracting business. Customer disputes can occur despite your best efforts, which is why you need insurance coverage to protect your business itself while the lawsuit progresses.

Equipment

As an independent contractor, you have invested heavily into the success of your company, right down to purchasing and maintaining the equipment and materials you use to do your job. If your equipment breaks down or gets damaged on the job site or en route, this is the coverage you need.

Business interruption

Business interruption can occur for many reasons. This insurance coverage protects your company if your income stream is halted due to insured events beyond your control.

Liability

This general term covers many exposures contractors face, ranging from injuries resulting from work that was performed to simple trips and falls on the job site. This type of contractor insurance is an ironclad necessity in today’s litigious society.

Business property

You need to protect your own business property just as you would your personal residence or vehicle. Materials, equipment, supplies and other assets housed at your business location or job site can be protected under a business property insurance policy.

Crime

Crime is another hazard of doing business today, and an increasingly serious one, at that. From workers with sticky fingers to strangers who see your job site-in-progress as an easy score, you can’t always control who comes by or what damage they may do. But you can control how much it impacts your growing business by adding a crime insurance rider to your contractor insurance policy.

How a Contractor Insurance Policy Can Benefit You

The obvious benefits of a contractor insurance policy are clear at this point: you don’t risk losing your business in the event other people or events intersect in a way that limits or interrupts the work you are doing.

But there are other, less-visible benefits of taking out a contractor insurance policy.

Customer trust

A major benefit is customer trust. When a new client contacts you to bid on a job, having contractor insurance in place can give them valuable peace of mind and increase the likelihood that you will get the job.

Peace of mind

Another major benefit is your own peace of mind. It’s hard to run a successful business from a place of fear, worry and stress! When you know that your best efforts are protected from unknowns such as climate change-related weather patterns and the actions of criminals, you can conduct operations with more confidence and courage.

Freedom to collaborate

Still another benefit that comes along with adding contractor insurance to your risk management program is the ability and freedom to collaborate on construction jobs knowing you are protected if something goes wrong.

As the Canadian Design-Build Institute explains, expert collaboration is a mainstay in an industry where technology is producing sweeping changes to how jobs are planned and executed. But without insurance protection, the blurred lines of responsibility that collaboration sometimes creates can become harder to navigate in jobs gone wrong.

Worker and personal protection

Finally, having a customized contractor insurance policy in place provides protection to those whose livelihoods depend on yours: your workers, vendors, staff and family.

Get in Touch

Here at Mackay Insurance Brokers, we have more than 165 combined years of personal, residential, auto and commercial insurance expertise. Our seasoned staff bring a customer-service-first focus to every consultation and every policy we write.

Chat with us online, email us or give us a call at 1-888-853-5552 to speak with a knowledgeable agent today.

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Insurance Basics: How to Figure Out How Much Insurance You Need

calculations on desk

The world of insurance can be a complicated one even from the inside out. From the outside in, it can sometimes feel nearly impossible to work out exactly what type of insurance you need.

Here at Mackay Insurance, we have been serving our continually growing list of clients for more than four decades. Even so, there is still something new to learn about the insurance industry each and every day!

One of the most frequently asked questions we hear every day is, “How do I figure out how much insurance I need?” That is what we are going to talk about in this article.

Types of Insurance

You may find you need different types of insurance at different times in your life.

There are four basic types of insurance policies:

Of course, there can be many subsidiary types of insurance policies within each of these major insurance categories.

For example, homeowner insurance can also include renter insurance, cottage or seasonal home insurance, flood insurance and other related policies. Auto insurance also encompasses motorcycle insurance, recreational vehicle insurance, classic or vintage car insurance, RV and motorhome insurance.

Life insurance is its own separate arena with a variety of policies ranging from a simple term life insurance policy to complex whole life (permanent) life insurance.

Business insurance can span the gamut from commercial vehicle insurance to liability insurance to a specialized suite of insurance products geared toward large corporations, home-based businesses and nonprofit entities.

There are also various specialty insurance policies, such as travel insurance, high value/rare possessions insurance, health insurance, long-term disability insurance and pet insurance.

Insurance Basics You Should Know

Even if you don’t know much about insurance itself, you probably recognize the word “premium.” This is the fee you pay in order to receive insurance coverage.

Premium costs

Your premium can vary quite a lot based on a wide variety of factors. Some factors will be beyond your control. For example, the make and model of the car you drive, the neighborhood you live in, even your personal health history can influence how much you pay for insurance coverage.

But some factors will be within your control. For instance, you can bundle a variety of policy types together with a single insurance provider to receive a discount on your total policy premiums.

Deductible levels

You can also set your deductible level higher or lower to influence how much you pay in insurance premiums annually. Some insurance companies offer payment options that avoid finance fees—for example, making three payments instead of paying monthly.

A higher deductible will lower the premium, but you want to check pricing before simply going with a high deductible. If the premium savings for switching to a higher deductible is modest, you may prefer a lower deductible. An important question when choosing a deductible is what amount you could come up with comfortably if you had a claim. If the most you could come up with is $1,000, then a $2,500 deductible may not be a good solution for you even if the cost is lower.

Optional discounts

In addition to a discount for bundling multiple types of policies together under a single insurance provider, there are often other discounts you may qualify to receive. Examples include discounts for installing winter-rated tires during the winter months, security features of your car or home and being mortgage-free on your home. Even if you are not shopping to change insurance companies, periodically stop in to see your broker and talk through you circumstances and what discounts you may be eligible for.

Choosing Your Insurance Provider

Here in Canada, car insurance is regulated by each province or territory. For the most part, the coverage from different insurance companies operating in the same province will be the same. However, prices can vary significantly—different insurance companies specialize in different segments. It is worth checking options, and a broker who represents several insurance companies can do the shopping for you.

Other types of insurance, such as house insurance, are less regulated. There will often be core coverages that are the same between companies, and there can then be significant differences in the coverage that one company provides compared to another. As an example, Company A may offer flood insurance at your address, and Company B may not.

Customer service

You want to be sure the broker or insurer you select can communicate with you the way you like to communicate. In-person visits? Telephones answered by a live person? Email? Chat-based live customer service support? All options are available, but not always all from the same broker or insurance company.

Claims processing

Research what other customers say about working with this insurer and whether the insurer serves as a client advocate when claims are filed.

Get in Touch

Contact us online, or give us a call at 1-888-852-5552 for help with all your insurance needs!

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