The Importance Of Contractor General Liability Insurance

If you’re a contractor, then you need to get yourself contractor general liability insurance. It can protect you and your business. Continue to read on to learn how insurance can protect you, as well as other useful information.

insurance for contractors in canada

1. How Liability Insurance Can Protect Your BusinessLiability insurance for contractors protects your company’s assets, which is what you want in the event a third party alleges that your company caused bodily harm or damage to their property. Not only that, but insurance can protect your business in the event you have to go to court and judgement passes because it may cover court costs, as well as settlements of up to a certain amount. Furthermore, it provides your employees with security because they too will be protected from uncertainty.

2. Key Details About Insurance Plans – Different insurance policies will cover different things, but generally speaking you can get insurance that includes bodily injury claims. As a contractor who works on various job sites, you know that accidents can and do happen, and this is especially true when untrained professionals are on the job site. Liability insurance can protect your business in the event an accident happens and a lawsuit is brought forward.

Property damage claims can cost a contractor their entire business, and this is another reason to get liability insurance. If a policy covers property damage, then your business will be protected against lawsuits that allege you caused damage to someone’s property. Just make sure you double-check your policy before purchasing it because you want to find out what exactly is covered and what isn’t.

Personal injury and advertising injury claims can sometimes be brought against a contractor, and this is why many policies includes coverage for it. The last thing you want is to be sued for copyright infringement by another company or brand. You might be surprised at how many contractors have been sued for it and if you’re policy covers advertising injury or personal injury, then you will be thankful, especially in the event you are sued.

3. Buying Insurance – Don’t just buy any old insurance policy. Different companies offer different insurance policies, and you want to compare as many as you can and find out what each policy covers and how much you can expect to pay for it. Remember, the cheapest policy may not be the best one, and the priciest one may not be the best one too. The good news is getting quotes from a number of companies within a short period of time is easy to do, as you can do it all online.

contractor liability insurance canadaNow you know the importance of contractor general liability insurance and how to find and choose a good policy. It doesn’t matter what industry you work in, if you’re a contractor, then you should get liability insurance as soon as possible. All you have to do now is start shopping around for liability insurance and compare a few policies and then choose the one you think will best meet your needs.

The Immense Importance Of Avoiding Surety Bond Claims

Avoiding Bond Claims

As a company, which services the residents of Canada, you have a daunting task ahead. You have plenty of different responsibilities to juggle and these can become overwhelming from time to time. Another thing that needs to be noted is the need for surety bonds. The bond helps to provide the client with protection, while placing additional stress on your shoulders. In order to keep your business afloat, protect your integrity and solidify your future, it is pertinent to avoid bond claims at ever step and turn. Below, you’ll learn about the importance of avoiding claims.

Massive Losses

Most business owners will immediately focus on the repercussions of losing a claim. This is no coincidence. Losing a claim will undoubtedly sting and will take a large sum of money directly from your company’s budget. When the bond claim is made, the surety company will analyze the situation and make a ruling. If they rule against you, they’ll reimburse the obligee. The amount of the reimbursement will depend, but could be as much as the original bond amount.

Once the surety has repaid the client, they’ll then turn their attention to your company. This is the case, because you signed the indemnity agreement, in order to get the bond. Typically, this contract guarantees that you’ll pay the surety back for any claims that they’re forced to pay out. Since the amount lost due to a claim could be astronomic, it will put smaller businesses into jeopardy.

Could Hinder Your Future

Another thing to take into consideration is your company’s future. For many businesses, it will be absolutely pertinent to be able to maintain the validity of the surety bond. If you lose your bond, you’ll need to proceed through the entire process again and this could prevent you from earning money in the short term. Also, if the bond claims continue to pile up, there will likely come a time, when you’ll be unable to pay the reimbursement amount. If this happens, the surety will undoubtedly cancel your bond and refuse to provide you with a refund.

Of course, the most devastating fact of all is that this type of behaviour could stick with you. Other surety companies will know about your failures and they’ll be very cautious about issuing you bonds. If you’re not careful, your ability to get bonded could be eliminated entirely.

Reputation Is Pertinent

As you likely already know, reputation is incredibly important for businesses. If your business obtains a bad reputation, you’ll find it much more difficult to attract customers and business partners. Unfortunately, bond claims can have a major impact on your reputation. If you consistently rack up claims and fail to offer reimbursement, you’ll quickly give off the impression that you’re unreliable and unprofessional.

Remember that word of mouth is vital. If that word is negative, your business is going to be hurt severely. To prevent this from happening, you should do your best to avoid claims.

Tips For Prevention

Now that you’ve learned about the enormous importance of avoiding claims, you should learn how to prevent them. The truth of the matter is that the majority of Canadian bond claims stem from a lack of communication between the service provider and the client. You won’t have much difficulty fixing this problem. Remember to remain in close contact with the client at all times. You should also provide them with work on hand reports throughout. This will give them encouragement that the work is progressing and will be finished on time.


At the end of the day, claims could wreck your business. Not only will it result in immense monetary loss, but claims will also hurt your reputation. So, if you truly wish to succeed, you need to protect your business by avoiding claims!

Surety Bonding Limits In Canada

Do Surety Bonds Have Limits?

You already know that bonds expire after a certain amount of time has passed and they can be renewed. However, you may not know that bonds can have limits. This basically means that your bonds can be limited to a specific monetary value. Just to recap a little bit, surety bonds are preapproved for two maximum values. First, you have the single limit, which will be the largest amount that you can be bonded for a single project.

surety capasity

Next, you have the aggregate limit. This is the total amount of bonded work that you can have at one time. For instance, you can have multiple projects going at one time, but the total bonded cost of all projects cannot exceed your aggregate limit.

How To Increase Your Bond Limit

When a surety bond company like SuretyKings® is considering underwriting your bond, they are going to look at your financial stability. Your financial statements and work history will show the surety company, if you are capable of handling larger projects that require larger bonds. Your statements must show cash flow, equity, profit, and working capital.

When you are applying for a bond of this manner, it would be in your best interest to work with a CPA (Certified Public Accountant). He or she knows this industry and will be able to help you prepare your financial documents.

Choosing The Correct Accounting Method

There are several different accounting methods that you have to choose from. The cash method is probably the simplest of all, but it limits your company to only bidding on smaller projects.

The accrual method will allow you to greatly increase your bond limit, as long as your company is in good financial standing. When you choose a good CPA to work with, this is probably something that you will not have to worry about, because he or she will be able to guide your company in the right direction to success.

Construction Crane

Do Not Limit Yourself

It is a known fact that all surety companies have bond limits. Some companies will offer higher limits than others. You never want to miss out on the chance to take on a larger project to grow your business. This is why it is imperative that you check out several different surety companies, before you decide on which one to hire.


Everyone wants to be successful and as you can see, the key to a successful business are surety bonds. However, surety bonds can be tricky and you want to make sure that you fully understand them and their limits. If you want to limit your mistakes and losses when it comes to bonding, it is recommended to learn the definition of Surety Bonds, check out Investopedia, they explain it in the most simplest terms.

How does cancellation work when it comes to Surety bonds?

Can A Surety Company Cancel A Surety Bond Posted By A Government Contractor?

As you well know by now, a surety bond does expire after a certain amount of time. It is up to the principal to make sure that the bond does not expire, before the construction project is complete. To prevent a bond from expiring, all you have to do is send in the annual premium amount to the surety company, before the bond’s expiration date. If you are sending the payment by snail mail, be sure that you submit the payment at least two weeks in advance, so that it arrives early.

However, what if the principal wants to cancel a surety bond? It is possible that a bond can be canceled, but there are a few things that you need to know about canceling a bond.

Cancelling A Surety Bond

According to the Canadian Revenue Agency, an underwriter can cancel a surety bond that Cancelling a Surety Bondwas posted by a government contractor. However, in order for a surety company to cancel a government contractor’s bond, they will have to submit a notification in writing to the appropriate government entity. The Canadian Revenue Agency will investigate the request to see if a surety bond is no longer required and no monies are owed, by the principal.

The letter of cancellation must be sent by registered mail to the appropriate regional excise duty office and must be received 60 days, prior to the cancellation date. After the audit is conducted, a formal decision will be made, based on the evidence collected, during the investigation.

Unduly Cancellation

If the surety company fails to comply by these standards, their business license may be jeopardy. If the government contractor is still in operation and the bond was cancelled without written permission from the CRA, it will need to be replaced immediately. If the surety refuses to comply, their license will be suspended or revoked

Contractors making a deal


Underwriters are required to be compliance with their business licensed. Acting unethically will definitely put their business license at jeopardy and if you need more information about this topic, feel free to visit Canadian Revenue Agency website or contact an agent by phone or email.