This blanket liability coverage protects all parties involved in a construction project from liability arising from bodily injury or property damage to third parties during construction. 

Wrap-up liability insurance can either be purchased by the contractor in charge of the project (contractor-controlled) or the owner of the property (owner-controlled). 

Some advantages of Wrap-up liability include:

• A single policy that includes multiple coverages reduces the risk of having coverage gaps and insufficient limits.
• Cost savings, better protection and higher limits than purchasing multiple insurance coverages separately. 
• Significant time savings compared to managing multiple liability policies of subcontractors. 
• Simplifies the settlement of claims by eliminating lengthy litigation to establish blame.

Insured parties:

• Owners
• General contractor
• Project manager
• Sub-contractors
• Consultants, engineers and architects (subject to a professional liability exclusion).

 

Legal Expense

For small businesses that can’t afford to have a lawyer on retainer, this covers legal costs for unexpected legal events. It provides access to legal information and can be used to defend or pursue legal rights, including contract disputes and debt recovery.

Bonding & Surety 

A surety bond guarantees that an obligation (or contract) is fully satisfied. If it is not satisfied, the bond holder will be entitled to compensation for associated losses. Many clients, including those in government, will request you obtain a surety bond. Some Canadian provinces may even mandate a surety bond before work can begin.

A surety bond isn’t considered to be business insurance for a few reasons:

• It involves three parties
  • The owner and/or government body requesting the bond
  • The business responsible for fulfilling the obligation
  • The insurance/bonding company that guarantees the bond
• It’s paid out to a client, not to your business.
• You are required to pay back the entire amount of the bond to your surety provider.

Types of bonds:

Performance Bond – This guarantees that the obligation the contractor has with the owner is satisfied.

Labour & Material Bond (Payment Bond) – By guaranteeing the contractor will pay all subcontractors and suppliers in relation to the obligation (project), this limits the possibility of lien claims against the owner.

Bid Bond – This bond assures a contractor is prequalified to bid and they are serious about their obligations with respect to their tender and will follow through.

Consent of Surety (Agreement to Bond) – Not technically a bond, this is a commitment to provide the requested performance and/or labour and material bonds to the owner if the contractor is successful on their bid.

Maintenance Bond – This bond guarantees, for a specified period of time (typically one or two years), that the contractor’s work will be protected from any defects, faulty workmanship, and design.