Small Business Ownership and the Importance of Contractor Liability Insurance

The Implications of Contractor Liability Insurance for Small Business Owners

For many small business owners, one key to their success lies with the ability to operate on a lean budget in order to optimize their return on investment and their profit margin; this could entail such fundamental practices as maintaining just-in-time inventory levels and strict adherence to overhead cost/expense control.

Another facet of effective budget management for many small business owners is their employment of limited staff, relying instead on doing most/all of the work themselves or perhaps with a minimal number of part-time or seasonal employees. While this might be the right approach for their business in general, it could restrict their capacity and/or skill set to deliver the results expected by their clients – unless they engage independent contractors or third-party agents to provide certain services on their behalf.

While resorting to such measures can actually help increase gross revenues, i.e. securing more work or larger projects/contracts, it can also add a layer of complexity with respect to legal responsibilities.  Even though independent contractors or agents do not operate under the same name as the business that utilizes their services, they are deemed to be representatives of that company; thus any mistakes, omissions, or failures on their part can subject the business owner to liability insurance issues.

This is why small business owners in Durham Region must ensure that any/all agents or contractors hired to provide services/perform work on their behalf have active contractor liability insurance. Without this protection, and even though they might not be directly responsible for any losses or damage experienced by their client, the business could be at risk of a lawsuit by that client and subsequently incur the costs of any settlement.

Before any agreement is signed, and unquestionably before any service/work is started, small business owners will want to confirm that the contractor or agent has the following types of liability coverage:

Professional Liability Insurance – coverage for errors or oversights by the contractor in the delivery of their professional services

Product Liability Insurance – protection against litigation in the event that contractors produce any physical products that cause bodily harm/injury to other parties

Furthermore, in situations where the contractor is providing professional services to the small business (rather than on behalf of that business), the contractor should also have:

General Liability Insurance – coverage against various onsite accidents, including any property damage caused by the contractor and any physical injuries to the employees or owner of the business as a result of the contractor’s actions

To verify that a contractor/agent possesses valid contractor liability insurance, the small business owner can ask to see or receive a copy of the insurance certificate; if additional validation is preferred, the business owner can call the issuing company to double-check.

Commercial Insurance Coverage Aligned with the Needs Your Small Business

Small Business Ownership and the Importance of Contractor Liability InsuranceIn addition to ensuring that they are adequately protected relative to contractor liability, it is extremely important for any business, and especially small businesses, to safeguard their investment and their assets with a commercial insurance policy. For almost 100 years, insurance brokers from Petley-Hare Limited have been providing Durham Region’s small business owners with tailored commercial insurance solutions to suit their needs.

Very few small businesses are exactly the same; they will differ in terms of size, market, level of risk, etc. Consequently, their commercial insurance coverage needs to align with the parameters specific to their operation. The experienced professionals at Petley-Hare Limited can help new and existing businesses obtain adequate and appropriate insurance coverage by collecting and comparing quotes from several providers then recommending the option that offers the best possible coverage at the most affordable rate.

Please go to for further information on the support available from the commercial insurance brokers at Petley-Hare Limited to assist small business owners throughout Durham Region, including the communities of Oshawa, Pickering, and Bowmanville.

To speak with one of our commercial insurance experts, call Petley-Hare Limited today at 1-800-216-5324 or contact us to book a no-obligation discussion. We are located across Durham Region for your convenience, with offices in Bowmanville, Oshawa, and Pickering.