Essential Insurance Policies Every General Contractor Needs in 2025

It’s been said that construction is the art of making a meaningful whole out of many parts. Nobody knows that better than general contractors and construction and skilled trade professionals.

The year ahead, however, may see these professionals having to manage many more parts as the construction and renovation industries change due to anticipated economic impacts, supply chain challenges, and inflation fluctuations, not to mention more frequent and ferocious natural disasters and extreme weather that significantly ups liability risks.

To effectively deal with the multitude of challenges they’ll face, contractors and construction professionals should start planning how to nail down the insurance coverage they need and be prepared for the months ahead when construction and renovation season kicks into high gear.

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10 Essential Types of Insurance Contractors and Construction Pros Need

Creating a comprehensive contractor insurance or construction insurance policy depends on the type of work you do, the services you provide, and the risks you face for every project you embark upon. 

Here are 10 types of liability insurance designed for contractors and construction professionals that you should consider:

1. General Liability Insurance

If a customer or passerby is injured at or near your job site or their personal property is damaged by your operations, general liability insurance is what will help. It covers third-party bodily injury and property damage claims that occur because of your operations or on your business property. Should an injured person sue you for damages, general liability also helps cover your legal expenses and negotiated or court-ordered settlements.

2. Wrap-Up Liability Insurance

Wrap-up liability insurance is necessary for large construction projects. This all-in-one policy protects everyone involved in a big build – general contractors, subcontractors, owners, engineers, and architects. It covers third-party and general liability risks and removes the risk of gaps or insufficient coverage limits across multiple policies.

3. Pollution Liability Insurance

Pollution liability coverage protects contractors from environmental liabilities associated with exposure to pollution caused by construction. It covers third-party claims against bodily injury, property damage, and legal and cleanup expenses triggered by hazardous pollutant exposure from your operations while a job is ongoing and after completion. 

4. Tools and Equipment Insurance

Here’s a sobering thought: According to Aviva Canada, theft of tools, equipment, and heavy machinery from construction sites is estimated to cost at least $46 million annually, with up to $20 million of those losses occurring in Ontario. That’s almost an industry unto itself.

Tools and equipment insurance covers contractors’ transportable tools or equipment from losses due to theft, vandalism, and damage caused by fire or water.

There are things contractors and skilled trades professionals can do before and after experiencing tools and equipment theft.

5. Builder’s Risk Insurance

Also known as course of construction insurance, a builder’s risk policy is a form of property insurance designed to protect contractors and property owners from the beginning to the end of any project. It covers buildings, structures, and materials during construction or renovation jobs until they’re complete. 

This type of policy pays for losses or damages caused by an insured event, such as fire, theft, or vandalism. Overland flood and sewer backup risks can be covered at an additional cost.

6. Installation Floater

It might be common to overlook getting an installation floater for your next job, but it’s a potentially expensive oversight. An installation floater protects a contractor’s property or materials at a temporary site, while in transit, or during the installation process until it is installed.

For example, if an HVAC contractor stores a new air conditioning unit at a job site overnight to install the next day, and it’s stolen or vandalized before installation, that contractor would be on their own to pay to repair or replace it. However, if they have an installation floater, it would cover those costs.

7. Commercial Auto Insurance

You can’t rely on personal car insurance for vehicles used for business purposes. If you do, you could be in for an unpleasant surprise after getting into a collision. 

For contractors and construction professionals, any vehicle or trailer used to transport people, packaged goods, raw materials, or haul equipment should be covered by commercial auto insurance.

When getting commercial auto coverage, and depending on the age and value of your vehicle, it may be worthwhile to include optional collision or upset insurance and comprehensive insurance to the policy. 

Collision or upset insurance covers losses to your vehicle following a collision with another vehicle, a stationary object (like a traffic light), or if it rolls over in a crash.

Comprehensive insurance covers damages caused by theft, vandalism, natural disasters, extreme weather, flying or falling objects, fire, or collisions with wildlife if an animal darts out in front of you unexpectedly while driving. 

Tip: Optional all-perils insurance is a combination of both collision and comprehensive insurance.

8. Commercial Property Insurance

You may spend most of your time at various job sites, but the office and storage compound where your contracting business operates also needs protection. 

Commercial property insurance pays for losses or damages to your business property, contents, and inventory caused by a natural disaster, fire, theft, or vandalism.

9. Drone Liability Insurance

Increasingly, many construction professionals are using drones at job sites. However, unmanned aerial vehicles (UAVs) pose liability risks. 

Drone liability insurance covers privacy-related claims, third-party bodily injury and property damage, and device protection if lost, damaged, vandalized, or stolen.

10. Umbrella Liability Insurance

Commercial umbrella insurance (also called excess liability insurance) extends protection to your existing liability coverage limits. It acts as an extra layer of security when liability claims exceed your primary liability insurance policy limits.

Get the Contractor Insurance Coverage You Need For the Coming Season Now

Zensurance is the go-to source for Canadian general contractors, subcontractors, and skilled trades professionals to get the customized, low-cost contractor liability insurance they need to protect their finances and careers.

Fill out our online application for a free quote in less than five minutes.

We can answer your questions, provide advice on the coverages and coverage limits your policy may need, and quickly issue your policy documents and a certificate of insurance.