Insurance Requirements for Commercial Renovation in Ontario

Insurance is not optional on a commercial renovation project in Ontario. It protects you from liability if a worker is injured, if the building is damaged during construction, or if a third party is harmed by the construction activity. As the party hiring the contractor, you have a responsibility to verify that proper coverage is in place before any work begins.

Required Insurance Types

Commercial General Liability (CGL)

CGL insurance covers bodily injury and property damage claims arising from the contractor's operations. If a contractor drops a tool from a ladder and damages the floor below your suite, or if a visitor trips over construction debris, the CGL policy responds.

Minimum coverage for commercial renovation in Ontario: $2 million per occurrence. Many landlords and property managers require $5 million. VNG carries $5 million CGL coverage.

WSIB (Workplace Safety and Insurance Board)

All construction employers in Ontario must register with WSIB and maintain an active account. WSIB provides workers' compensation coverage for employees injured on the job.

Before hiring a contractor, request a WSIB clearance certificate. This certificate confirms that the contractor's account is in good standing and all premiums are current. If you hire a contractor without valid WSIB coverage and a worker is injured on your project, you can be held liable for the claim.

A WSIB clearance certificate is dated and has an expiry. Verify that it is current as of your project start date.

Builder's Risk Insurance

Builder's risk insurance covers damage to the construction work itself during the renovation. This includes fire, water damage, theft of installed materials, and vandalism. Standard CGL does not cover damage to the work in progress.

Builder's risk is not always required on smaller tenant improvement projects (under $200,000), but many landlords require it on larger renovations. If your lease requires it, confirm who is responsible for procuring the policy (the contractor or the tenant).

Professional Liability

If you are hiring a design team (architect, engineer, interior designer), they should carry professional liability insurance (also called errors and omissions insurance). This covers claims arising from design errors or omissions. If the mechanical engineer undersizes the HVAC system and the contractor has to redo the work, professional liability responds.

Minimum coverage: $1-2 million is standard for small to mid-size commercial projects.

What to Request from Your Contractor

Before signing a construction contract, request:

1. Certificate of insurance showing current CGL coverage with the policy limits, effective dates, and your entity named as additional insured
2. WSIB clearance certificate with a valid expiry date that covers your project timeline
3. Subcontractor insurance: Confirm that the contractor requires all subcontractors to carry their own CGL and WSIB coverage. A responsible contractor does not allow uninsured subcontractors on site.

VNG provides all three documents at contract signing without being asked. If your contractor hesitates or cannot produce these documents, treat that as a serious red flag.

Additional Insured Endorsement

Most landlords and property managers require that they be named as "additional insured" on the contractor's CGL policy for the duration of the project. This means the landlord has coverage under the contractor's policy for claims arising from the construction activity.

Your contractor's insurance broker can issue a certificate of insurance with the additional insured endorsement. This is a standard request and takes 1-2 business days.

What Happens Without Proper Insurance

If a contractor operates without adequate insurance and an incident occurs on your project:

• No CGL: You, as the hiring party, may be directly liable for property damage or injury claims. Your own business liability policy may not cover construction-related incidents.
• No WSIB: If a worker is injured, WSIB can assess the costs against you as the "constructor" or principal. This can result in claims of $50,000 or more for a single injury.
• No builder's risk: If fire or water damages the partially completed renovation, you bear the full cost of the loss. On a $300,000 project, this can be catastrophic.

Verifying Insurance Is Current

Insurance certificates are snapshots. A policy can lapse after the certificate is issued if the contractor stops paying premiums. For projects longer than 3 months, request an updated certificate at the midpoint.

For WSIB, you can verify a contractor's account status directly on the WSIB website using their operating name or account number. This takes 2 minutes and gives you real-time status.

VNG carries $5 million CGL, maintains active WSIB registration, and provides all insurance documentation at contract signing. Contact us to discuss your project.