Insurance Checklist for Contractors Before Starting a New Project
Starting a new construction project is intensive, there can be many ups and downs in the start. But amidst all the moving parts, don’t overlook a critical element that is ensuring your business is fully protected from the risks that come with every step. Whether you’re a contractor, subcontractor, or specialized trades professional, having the right insurance coverage in place before work begins is a prerequisite. At A-KAN Insurance, we work closely with contractors across Canada to provide tailored insurance solutions that address real world risks from job site accidents to contractual liabilities ensuring not a single thing is a miss in your coverage that can lead to costly delays, legal issues, or financial loss.
This comprehensive insurance checklist is designed to help you review your coverage, identify potential gaps, and move forward with confidence before starting your next project.
1. Confirm Your Commercial General Liability (CGL) Coverage
Commercial General Liability insurance is the most important aspect of your coverage as it protects your business against third-party claims involving bodily injury, property damage, and legal expenses and should not be overlooked. Also reviewing your policy whether it accurately reflects your current scope of work is crucial as many contractors add new services but never update it in the policies which can lead to financial loss at times of claims. Moreover project contracts often require higher liability limits than what your regular policy offers. At A-KAN Insurance, we help ensure your CGL coverage is not only active but also aligned with your operational risks and contractual obligations giving you protection where it truly matters.
2. Ensure Worker’s Compensation Compliance
Workplace injuries can happen on any job site, even when everything is well managed, that’s why worker’s compensation insurance is essential and required in most Canadian provinces, making sure all your employees are properly registered and covered under the right provincial authority. Also, make sure your subcontractors have their own valid workers’ compensation coverage. If they don’t, your business could be held responsible for any injuries that occur during their work.
3. Secure Builder’s Risk Insurance
Builder’s Risk Insurance also called the Course of Construction insurance protects the construction project while it is being built, this protects against loss due to fire, theft, vandalism and damages caused by weather. One of the biggest mistakes that a contractor may make is underinsuring the value of the construction project or failing to include insurance for materials which are transported or stored off site. Here at A-KAN Insurance we provide builder’s risk insurance that is tailored to include the entire value and duration of your construction project to ensure that your investment is fully protected from start to finish.
4. Review Professional Liability (Errors & Omissions)
Professional liability insurance is a critical component of risk management for a contractor involved in interior design projects. This type of coverage protects you against any claims of negligence, errors, or omissions in your services as even minor design errors or miscalculations can lead to significant financial losses or project delays. Having this coverage in place demonstrates professionalism and adds an extra layer of credibility when working with clients, developers, and project stakeholders.
5. Update Commercial Auto Insurance
Vehicles are an essential part of most contracting operations, whether you’re transporting tools, materials, or crew members and personal auto policies typically do not cover business related activities, making commercial auto insurance a necessity, thereby before starting a project review your policy to ensure all vehicles and drivers are properly listed. It’s also important to assess whether your liability limits are sufficient, especially if your operations involve heavy equipment or frequent transportation. Here, at A-KAN Insurance we help tailor your fleet coverage to match your business activities, reducing exposure on and off the road.
6. Verify Subcontractor Insurance
Subcontractors play a vital role in construction projects but always request proof of insurance and review their coverage limits carefully as not doing so can create a risk for your business. It’s always a best practice to have your business listed as an additional insured on their policy where applicable. This step helps protect your company from claims arising from subcontractor work and ensures accountability across all parties involved in the project.
7. Protect Your Tools and Equipment
Your tools and equipment represent a significant financial investment. Theft, damage, or loss of equipment can disrupt your workflow and lead to unexpected expenses, hence equipment should be insured. Whether they are on site, in storage, or being transported between locations, A-KAN Insurance always advises contractors to ensure their equipment coverage is comprehensive and flexible, so they can operate without interruption.
8. Review Contractual Insurance Requirements
Each contract has its own list of insurance requirements, and failure to meet these requirements may lead to delays in the project or disqualification from the project. Some of these requirements include the coverage amount, the need for the contractor to be named as an additional insured, and the need for the contractor to waive the right of subrogation. It is important to take the time to review your contract in detail, as this can save you a lot of time and money in the future.
9. Check Policy Expiry and Project Duration Alignment
One of the most overlooked risks in construction insurance is the lapse of the insurance coverage while the project is still active, as even a small lapse in the insurance coverage may result in severe financial and legal repercussions on your business. Therefore, while undertaking a new project, we recommend that the business owner ensures that all the insurance policies should remain active for the entire duration of the project, including the potential delays.
Final Thoughts
No two construction projects are the same, and a one size fits all insurance approach rarely works. That’s why working with an experienced insurance broker is essential. At A-KAN Insurance, we take a proactive approach by assessing your project specific risks, identifying gaps in your existing coverage and recommending tailored insurance solutions. Our goal is to provide contractors with clarity, confidence, and comprehensive protection, so you can focus on delivering high-quality work without unnecessary risk.
