Hiring an uninsured or underinsured contractor is one of the most dangerous financial mistakes an Ottawa homeowner can make. If an uninsured worker is injured on your property, you could be held personally liable for medical expenses, lost wages, and legal costs — potentially hundreds of thousands of dollars. This guide explains the types of insurance that Ottawa contractors should carry, how to verify coverage, and how contractor insurance protects YOU as the homeowner.
There are several distinct types of insurance that protect both contractors and the homeowners who hire them.
CGL insurance is the most fundamental coverage a contractor should carry. It protects against third-party claims for bodily injury, property damage, and personal injury arising from the contractor's work. In Ottawa, the minimum recommended CGL coverage for residential contractors is $2 million per occurrence. This covers scenarios like a contractor accidentally damaging your neighbour's fence during excavation, a visitor tripping over construction materials and injuring themselves, water damage to your finished basement caused by a plumbing error during a kitchen renovation, or fire damage from improper electrical work.
WSIB provides no-fault workplace injury insurance for employees in Ontario. When a contractor has WSIB coverage, their injured workers are compensated through the WSIB system rather than through a lawsuit against the homeowner. Under Ontario's Workplace Safety and Insurance Act, if a worker who is NOT covered by WSIB is injured on your property, you as the homeowner could be liable for their medical expenses, rehabilitation costs, and lost income.
Professional liability (errors and omissions) insurance covers design professionals for errors in their professional advice or designs. Auto insurance with commercial coverage is necessary for contractors using vehicles for business purposes. Pollution liability insurance is relevant for contractors doing asbestos removal, mould remediation, or environmental cleanup.
Verifying insurance is straightforward but requires diligence. Never take a contractor's word for it.
First, request a Certificate of Insurance (COI) from the contractor. Verify the policy has not expired — check the effective and expiration dates. The COI should show a minimum $2 million per occurrence limit. Contact the insurance company listed on the COI to confirm the policy is active. For WSIB, ask the contractor for their WSIB clearance certificate. You can also verify WSIB coverage online through the WSIB clearance certificate tool.
Be on alert for contractors who say they are 'self-insured' (this is not a valid substitute), who claim their insurance is 'being renewed', who say small jobs don't need insurance, who offer to lower the price if you skip the insurance requirement, or who provide a certificate that looks homemade. A contractor who is evasive about insurance is telling you something important about their business practices.
Real-world examples illustrate why contractor insurance is non-negotiable for Ottawa homeowners.
An Ottawa homeowner hired an unlicensed, uninsured contractor for a bathroom renovation. The contractor's worker fell from a ladder and suffered a back injury. Without WSIB coverage, the worker sued the homeowner's home insurance, which denied the claim because the homeowner hired an uninsured contractor. The homeowner faced $180,000 in personal liability. In another case, a paving contractor without CGL insurance broke a city water main during a driveway excavation in Kanata. The repair cost was $12,000 — with no insurance to cover it, the homeowner was left to negotiate payment directly with the City.
Beyond verifying insurance, protect yourself by including an insurance requirement clause in your contract. Request to be named as an 'additional insured' on the contractor's CGL policy — this gives you direct coverage under their policy and ensures you are notified if the policy is cancelled. Never make final payment until you have verified that all subcontractors were covered by WSIB during the project.
Understanding what insurance costs contractors helps you evaluate whether a low quote is too good to be true.
In Ottawa, a typical small contractor pays $3,000 to $6,000 per year for $2 million CGL insurance. WSIB premiums are based on payroll and industry classification — for construction trades, WSIB rates range from $3 to $10 per $100 of payroll. A contractor who quotes 30 to 50 percent less than competitors may be cutting costs by skipping insurance — and transferring that risk to you.
When you compare quotes, the insured contractor's price includes the cost of protecting you. The uninsured contractor's price shifts that risk onto your shoulders. A $5,000 savings on a bathroom renovation quote is meaningless if you face a $50,000 liability claim because the contractor did not carry WSIB.
Request a Certificate of Insurance (COI) showing CGL coverage of at least $2 million. Contact the insurance company listed to confirm it is active. For WSIB, ask for a clearance certificate or verify online through the WSIB website.
At minimum, every Ottawa contractor should carry Commercial General Liability (CGL) insurance of at least $2 million per occurrence and current WSIB coverage.
Potentially yes. Under Ontario law, if a worker not covered by WSIB is injured on your property, you could be liable for their medical expenses, rehabilitation, and lost income.
Insured contractors include the cost of CGL insurance ($3,000 to $6,000 per year) and WSIB premiums in their pricing. This is a legitimate business cost that protects both you and them.
Yes, requesting to be named as an additional insured on your contractor's CGL policy is a smart step for larger projects.
Yes. A contractor needs insurance for every job regardless of size. A $2,000 painting job can result in a $50,000 liability claim if the painter falls off a ladder and is not covered by WSIB.