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Construction Insurance in Canada

Construction & Trade Insurance | Boardwalk Insurance — A Division of Oracle RMS

Comprehensive coverage for Ontario and Greater Toronto Area construction companies. Protect your projects, equipment, and liability — from general contractors and subcontractors to specialty trades and design-build firms. Boardwalk Insurance serves businesses across Canada (all provinces except Quebec), with fast quotes from 30+ A-rated carriers and same-day certificate issuance.

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What Is Construction Insurance?

Construction insurance is a coordinated package of commercial insurance coverages designed to protect construction businesses — and the projects they deliver — from financial losses caused by accidents, property damage, equipment failure, professional errors, and third-party liability claims.

Unlike a single-line policy, construction insurance brings together multiple distinct coverages under one program. At its core is Commercial General Liability (CGL), which protects against third-party bodily injury and property damage arising from your operations. Depending on project type and contract requirements, a complete construction insurance program typically also includes Builder's Risk or Installation Floater for property under construction, Equipment Coverage for tools and machinery, and Professional Liability (E&O) for errors in design or project management.

In Ontario and across Canada, construction insurance is a practical necessity. Most general contracts, subcontract agreements, building permits, and project owners require proof of insurance before work can begin. A single uninsured loss — a worker injuring a passerby, a fire destroying materials on-site, or a design error requiring structural rework — can expose a construction business to claims that threaten its financial survival. The right insurance program eliminates that exposure and keeps projects moving.

Protect Jobsites

CGL and project liability policies protect against third-party bodily injury and property damage claims arising from your construction operations. Whether a visitor is injured on an active site or a neighbouring property is damaged during excavation, these coverages absorb legal defence costs and settlement payments — keeping the claim off your balance sheet.

Safeguard Equipment & Materials

Builder's Risk and Installation Floater policies protect materials, supplies, and structures under construction from fire, theft, vandalism, and weather damage — from the moment materials leave the warehouse to the point of permanent installation. Equipment Coverage addresses sudden mechanical or electrical breakdown of construction machinery, preventing costly unplanned project delays.

Who Needs Construction Insurance in Canada?

If you build, renovate, manage, or own construction projects anywhere in Canada, you need construction insurance. The following business types routinely require coverage — either because their contracts demand it, their licensing body requires it, or the financial risk of operating uninsured is simply too great.

Subcontractors often assume the general contractor's policy covers them — it does not. Every subcontractor operating in Ontario should carry their own CGL policy and name the general contractor as an Additional Insured. This protects both parties in the event of a loss and is required under most standard subcontract agreements in Canada.

What Does Construction Insurance Cover?

Coverage depends on your project scope, contract requirements, and risk profile. Below are the core protections that Ontario and Canadian contractors typically carry, with a clear explanation of what each coverage does and why it matters.

1. Commercial General Liability (CGL)

CGL is the foundation of every construction insurance program. It protects your business against claims made by third parties — members of the public, clients, adjacent property owners — for bodily injury or property damage caused by your construction operations, products, or completed work.

Most contracts and project owners in Ontario require a minimum of $2 million per occurrence in CGL coverage. Infrastructure and large commercial projects commonly require $5 million or more. Limits should always be reviewed against specific contract requirements before bidding.

What CGL covers:

2. Builder's Risk Insurance

Builder's Risk is a project-specific property policy that covers a structure under construction against physical loss or damage. It protects the owner, general contractor, and subcontractors' insurable interests in the project from groundbreaking to substantial completion.

Builder's Risk policies are typically written on an "all-risks" or "open perils" basis, meaning they cover all causes of loss unless specifically excluded. Common exclusions include earthquake, flood (unless added by endorsement), and faulty workmanship. In Canada, Builder's Risk is especially important given exposure to harsh winters, spring flooding, and high-wind events.

What Builder's Risk covers:

3. Installation Floater

An Installation Floater covers materials, equipment, and supplies from the time they leave their point of origin — warehouse, supplier, or staging yard — through transit and on-site storage, up to the point of permanent installation. It is the coverage of choice for mechanical, electrical, and specialty contractors whose materials may be in transit or staged off-site for extended periods.

What an Installation Floater covers:

4. Equipment Coverage (Contractors' Equipment)

Contractors' Equipment coverage — sometimes called Inland Marine or Equipment Floater — protects owned, leased, or rented construction equipment and tools against physical loss or damage, wherever that equipment is located. Given the high replacement cost of modern construction machinery, this coverage is essential for any contractor who owns or operates equipment.

What Equipment Coverage covers:

5. Professional Liability (Errors & Omissions)

Professional Liability — also known as Errors and Omissions (E&O) insurance — protects against financial loss claims arising from mistakes, omissions, or negligence in professional services, including design, engineering, project management, and construction consulting. It is essential for design-build firms, construction managers, and any contractor who provides advice or drawings as part of their scope of work.

CGL policies explicitly exclude losses arising from professional services. Without a separate Professional Liability policy, design-related errors and project management mistakes are entirely uninsured — regardless of how much CGL coverage you carry.

What Professional Liability covers:

6. Surety Bonds

A Surety Bond is a legally binding financial guarantee — provided by an insurer or surety company — that a contractor will fulfill their contractual obligations. Surety bonds are distinct from insurance policies: the contractor is expected to repay the surety if a bond claim is paid. They are underwritten based on the contractor's financial statements, credit history, and project track record.

Surety bonds are contractually required on most public sector projects in Canada and on many large private commercial projects. Common bond types include:

Which Coverages Does My Business Need?

Coverage requirements vary by business type, project scope, and contractual obligations. This table provides a general guide — always confirm requirements against the specific insurance schedules in your contracts before binding coverage.

Contractor Type CGL Builder's Risk Installation Floater Equipment Coverage Professional Liability Surety Bond
General Contractor Required Required Recommended Required Recommended Often Required
Subcontractor / Trade Required Rarely Recommended Required Recommended Rarely
Home Builder Required Required Recommended Required Recommended Rarely
Renovation Contractor Required Often Required Recommended Required Optional Rarely
Design-Build Firm Required Required Recommended Recommended Required Often Required
Infrastructure / Civil Required Required Required Required Required Required
Remediation Contractor Required Rarely Recommended Required Required Rarely

Common Construction Risks in Canada

Understanding your exposure before a claim occurs is the most cost-effective risk management decision a contractor can make. These are the losses that most frequently affect Canadian construction businesses — and the coverages that respond to each.

Third-Party Bodily Injury

Construction sites are dynamic environments with significant exposure to pedestrians, delivery personnel, adjacent tenants, and inspection visitors. A single injury claim can involve medical costs, lost income, pain and suffering damages, and legal fees — frequently totalling hundreds of thousands of dollars. CGL insurance responds to these claims and covers your legal defence regardless of whether the claim has merit.

Example: A delivery driver slips on loose gravel at the perimeter of an active foundation pour and sustains a spinal injury. The resulting liability claim reaches $340,000, covered by the general contractor's CGL policy.

Coverage responds: Commercial General Liability (CGL)

Property Damage During Operations

Damage to client property or adjacent structures is among the most frequent construction insurance claims. Excavation, heavy equipment movement, vibration from pile driving, and demolition all carry elevated risk of unintended damage to neighbouring buildings, utilities, and infrastructure. Even a small excavation project can destabilize a neighbouring foundation.

Example: Excavation work for a commercial addition severs an unmarked utility conduit and cracks the foundation of an adjacent retail unit. Emergency stabilization, repairs, and business interruption costs total $185,000 — covered by the contractor's CGL.

Coverage responds: Commercial General Liability (CGL)

Equipment & Tool Theft

Construction equipment theft is a significant and growing problem across Ontario and Canada. High-value tools and heavy machinery are frequently targeted on unsecured sites — particularly over weekends and holidays. A single theft event can eliminate tens of thousands of dollars in equipment and halt a project for days or weeks, with liquidated damages accruing throughout.

Example: A skid steer loader, power tools, and a generator are stolen from a commercial site over a long weekend. Equipment losses total $78,000 and the resulting project delay triggers $12,000 in liquidated damages — both covered under the contractor's Equipment policy.

Coverage responds: Equipment Coverage (Contractors' Equipment Floater)

Weather & Environmental Damage

Canadian climate creates unique property exposures for construction projects. Partially complete structures are vulnerable to frost heave, ice loading, freeze-thaw cycles, spring flooding, and high-wind events. Without Builder's Risk insurance, the cost of weather-related losses to an incomplete structure falls entirely on the contractor or project owner.

Example: A spring flash flood fills a partially complete basement with 1.8 metres of water. Damage to formwork, rebar, and mechanical rough-ins totals $112,000 — covered under the project's Builder's Risk policy.

Coverage responds: Builder's Risk Insurance

Professional Errors & Design Flaws

Errors in drawings, structural calculations, or project management decisions can cascade into structural failures or expensive rework — with liability falling on the party responsible for the error. For design-build firms and construction managers, Professional Liability (E&O) insurance is not optional. CGL policies explicitly exclude losses arising from professional services.

Example: A miscalculation in load-bearing wall specifications requires a completed floor slab to be demolished and rebuilt. The resulting $380,000 professional liability claim is covered by the design-build firm's E&O policy; the CGL alone would not have responded.

Coverage responds: Professional Liability (E&O)

Post-Completion Defect Claims

Construction defect claims often surface months or years after a project reaches substantial completion. Water infiltration, structural movement, HVAC failures, and finishing defects are common sources. CGL policies with Products and Completed Operations coverage respond to these post-completion claims — but only if the policy was active when the work was performed and remains in force (or has been properly renewed) when the claim is made.

Example: Eighteen months after a commercial interior renovation, the client discovers water infiltration behind a newly installed curtain wall system, causing mould and structural damage. The contractor's CGL completed operations coverage responds to the $210,000 remediation claim.

Coverage responds: CGL — Products & Completed Operations

Contract Disputes & Legal Defence Costs

Even well-managed projects generate disputes. Change order disagreements, schedule delay claims, scope interpretation conflicts, and payment disputes can all escalate into formal legal proceedings. Legal defence costs alone — regardless of outcome — can reach six figures in complex construction litigation in Ontario. Insurance that includes robust legal defence cost provisions is not a luxury; it is a financial shield for every contractor who takes on contractual risk.

Example: A project owner claims $450,000 in liquidated damages following a schedule overrun on a commercial tenant improvement. After 14 months of litigation, the contractor's legal defence costs total $140,000 — partially covered under their CGL's defence cost provisions.

Coverage responds: CGL (defence costs), Professional Liability (if professional services involved)

Frequently Asked Questions About Construction Insurance in Canada

What is construction insurance and what does it include?

Construction insurance is a bundled commercial insurance program that protects contractors, builders, and project owners from financial losses arising during and after a construction project. A complete program typically includes Commercial General Liability (CGL), Builder's Risk or Installation Floater, Equipment Coverage, and Professional Liability (E&O). Surety Bonds are often added for projects that require performance and payment guarantees. The right combination depends on your role in the project, contract requirements, and your specific risk profile.

Is CGL the same as construction insurance?

No. Commercial General Liability (CGL) is the foundational component of construction insurance, but it does not represent the whole program. CGL covers third-party bodily injury and property damage claims arising from your operations. It does not cover your own property under construction (Builder's Risk), your tools and equipment (Equipment Coverage), or losses arising from professional services (Professional Liability/E&O). A complete construction insurance program combines CGL with these additional coverages to address the full spectrum of jobsite risk.

Do subcontractors need their own construction insurance in Ontario?

Yes. Subcontractors must carry their own insurance — they cannot rely on the general contractor's policy for protection. The general contractor's CGL typically excludes losses caused by subcontractors' independent operations. Standard subcontract agreements in Ontario require subcontractors to maintain their own CGL with limits of at least $2 million, name the general contractor as an Additional Insured, and provide a Certificate of Insurance before starting work. Subcontractors who operate without their own coverage expose their personal and business assets to uninsured claims.

What is an Additional Insured endorsement and why is it required?

An Additional Insured endorsement extends the coverage of a CGL policy to a named third party — typically the project owner, general contractor, or property manager — for claims arising from the named insured's operations. When a project owner requires that a contractor name them as an Additional Insured, they receive direct coverage rights under the contractor's policy. This is a standard risk transfer mechanism in construction contracts and is routinely required as a condition of contract award. Certificates of Insurance (ACORD 25) are used to evidence this coverage and should be issued before any work commences.

What minimum coverage limits do contractors need in Ontario?

The practical minimum for CGL in Ontario is $2 million per occurrence, which is what most residential and small commercial contracts require. Mid-size commercial projects typically require $5 million. Larger infrastructure, institutional, or government projects may require $10 million or more, often through a combination of primary CGL and Commercial Umbrella or Excess Liability coverage. Equipment and Builder's Risk limits should reflect replacement cost and project value respectively. Always review the specific insurance schedule in your contract — limits stated in the contract override general industry minimums.

How does Builder's Risk differ from a standard property insurance policy?

Standard property insurance policies are written to cover completed, occupied structures. They typically exclude or severely limit coverage for property under active construction because the risk profile changes dramatically during the build phase — open structures have no fire suppression, security systems, or weather protection. Builder's Risk is specifically designed to fill this gap. It covers the structure, materials, and soft costs from groundbreaking through substantial completion. Once a project is finished and occupied, it should transition to a standard commercial property or homeowner's policy. Contractors performing renovations on occupied buildings should confirm whether the existing policy covers work in progress or whether a Builder's Risk endorsement is required.

Can I get construction insurance for a single project?

Yes. Builder's Risk policies are typically written on a project-specific basis for the duration of construction. However, CGL and Equipment Coverage are almost always written as annual policies because they protect the business — not just a single project — from ongoing liability and equipment loss. Project owners and developers who engage contractors for one-off projects may also obtain Owner's Protective Liability (OPL) coverage, which specifically protects the owner's interest against claims arising from contractor operations on their project.

What factors affect the cost of construction insurance in Canada?

Construction insurance premiums are calculated based on several underwriting factors: annual revenues and projected contract values, project types (residential, commercial, industrial, or infrastructure each carries a different risk profile), number and classification of employees, claims history over the past five years, geographic territory of operations, and the coverage limits and deductibles selected. Contractors with clean claims histories, documented safety programs, and strong subcontractor prequalification processes consistently receive more favourable pricing. Working with a specialist broker like Boardwalk Insurance — who understands how to present your business favourably to underwriters — often results in materially better rates than approaching carriers directly.

What is a Surety Bond and how is it different from insurance?

A Surety Bond is a three-party financial guarantee between the surety (bond provider), the principal (the contractor), and the obligee (the project owner or government body). Unlike insurance, where the insurer absorbs losses, the contractor is expected to repay the surety company for any valid bond claim paid on their behalf. Surety bonds are underwritten based on the contractor's financial strength, creditworthiness, and track record — not statistical loss experience. They are most commonly required on public sector projects and large private commercial contracts. Common bond types include Bid Bonds, Performance Bonds, Labour and Material Payment Bonds, and Maintenance Bonds.

Why Construction Companies Choose Boardwalk Insurance

Boardwalk Insurance is a RIBO-registered commercial insurance broker and a division of Oracle RMS. We specialize in construction and trade insurance, giving contractors across Ontario and Canada access to competitive rates from 30+ A-rated carriers — including Intact, Aviva, Economical, Northbridge, Chubb, Travelers, CNA, and Gore Mutual.

Dedicated Construction Insurance Advisors

You work directly with licensed Ontario brokers who understand construction contracts, trade-specific risk exposures, and local project requirements. Our advisors understand the difference between an Installation Floater and a Builder's Risk policy, and can structure your coverage to satisfy specific contract wording. No call centres, no generalists — just knowledgeable construction insurance professionals.

Access to 30+ A-Rated Canadian Carriers

We compare your submission across more than 30 A-rated carriers to find coverage that matches your project profile and budget. Whether you are a sole proprietor electrician or a $50 million general contractor, we access markets that fit. Our established relationships with carriers like Intact, Northbridge, and Economical often result in pricing that contractors cannot obtain by approaching insurers directly.

Same-Day Certificate Issuance

Projects do not wait for paperwork. We issue contract-ready Certificates of Insurance (ACORD 25) quickly — including Additional Insured endorsements, Waiver of Subrogation, and Primary Non-Contributory wording — so your work can start without administrative delay. We maintain all active policy details on file and respond to certificate requests the same business day.

Claims Advocacy from First Notice to Settlement

When a loss occurs, our team advocates on your behalf throughout the entire claims process — from first notice of loss through adjuster negotiations and final settlement. We ensure your insurer meets their obligations under the policy and that your claim is resolved fairly and efficiently. Our responsibility to you does not end when the policy is bound.

15+ Years Serving Canada's Construction Industry

With 15+ years of experience and 500+ construction businesses protected, Boardwalk Insurance brings deep institutional knowledge of Canadian construction risk to every client engagement. We have placed coverage for residential and commercial general contractors, ICI subcontractors, infrastructure firms, design-build companies, and project owners — across Ontario and nationally.

Trusted by Canada's Leading Insurance Carriers

Boardwalk Insurance works with more than 30 A-rated Canadian and international insurance carriers. Our market access allows us to place construction insurance for high-risk trades, large project values, and complex multi-party programs that many brokers cannot accommodate.

Construction & Trade Insurance Specialties

Boardwalk Insurance serves the full spectrum of construction and trade businesses with industry-specific programs tailored to each trade's unique exposures and contractual requirements.

Where We Serve Construction Businesses

Boardwalk Insurance is headquartered in Vaughan, Ontario, and serves construction businesses across the Greater Toronto Area, Southern Ontario, and all Canadian provinces except Quebec. We issue fast quotes, contract-ready certificates, and provide ongoing broker support wherever your projects are located.

Ontario Markets We Serve

Toronto | Mississauga | Vaughan | Oakville | Hamilton | Kitchener | Brampton | Markham | Richmond Hill | Burlington | Guelph | London | Ottawa | Windsor | Sudbury | Thunder Bay

National Coverage

We also serve construction businesses in Alberta (Calgary, Edmonton), British Columbia (Vancouver, Victoria), Manitoba (Winnipeg), Saskatchewan (Regina, Saskatoon), Nova Scotia (Halifax), Newfoundland and Labrador (St. John's), and New Brunswick. Coverage is available in all Canadian provinces and territories except the Province of Quebec.

Get a Construction Insurance Quote Today

Whether you are a sole proprietor subcontractor or a multi-division general contractor, Boardwalk Insurance builds construction insurance programs that fit your projects, satisfy your contract requirements, and protect your business from the exposures that matter most. We compare quotes from 30+ Canadian carriers with no obligation, and most clients receive a quote within one business day.

Speak with a licensed construction insurance advisor at +1-416-477-9771 or email us at sales@myboardwalk.ca. Our office is located at 10 Great Gulf Dr, Suite 202, Vaughan, ON L4K 0K7. Business hours are Monday to Friday, 9AM to 5PM EST.

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