Liability Insurance vs WSIB: What Ontario Contractors Actually Need

Here's something that comes up constantly with trades in Ontario: "I have WSIB, so I'm covered, right?"

Not exactly. WSIB and liability insurance are two completely different things. They cover different risks, protect different people, and you almost certainly need both. Getting this wrong can cost you jobs, leave you exposed to lawsuits, or both.

Let's break down what each one actually does, where the gaps are, and what you need to have in place before stepping on a job site.

The Common Confusion

A lot of trades — especially newer ones — assume that WSIB is their insurance policy. It makes sense on the surface. You're paying premiums to a government agency, and if something goes wrong, you're "covered."

But WSIB only covers one specific category of risk: workplace injuries and occupational illness for workers. That's it.

It does not cover damage to a client's property. It does not cover a homeowner who trips over your tools. It does not cover a leak that shows up six months after you finished the job.

For all of that, you need Commercial General Liability (CGL) insurance. These are two separate products that solve two separate problems. Think of it this way:

WSIB protects your workers (and you)
CGL protects everyone and everything else

What WSIB Actually Covers

WSIB is a provincial workplace insurance system, not a private insurance policy. It covers:

Medical costs for workers injured on the job
Lost wages (85% of net earnings, up to the maximum)
Rehabilitation and return-to-work programs
Occupational illness (hearing loss, respiratory conditions, etc.)
Fatal injury benefits for a worker's dependents

In exchange for this coverage, workers give up the right to sue their employer for workplace injuries. It's a no-fault system — workers get covered regardless of who caused the injury.

What WSIB Does Not Cover

This is the part that catches people off guard:

Property damage — You back your truck into a client's garage door? WSIB doesn't pay for it.
Third-party bodily injury — A homeowner's kid trips over your extension cord and breaks an arm? Not WSIB.
Damage to a client's building or home — You nick a water line and flood a basement? Not WSIB.
Faulty workmanship claims — Your installation fails six months later and causes damage? Not WSIB.
Lawsuits from non-workers — Anyone who isn't a registered worker on your WSIB account is outside the system.

WSIB is worker-focused, full stop. Everything outside of worker injury is your problem unless you have liability insurance.

For a complete breakdown of WSIB — who needs it, how to register, what it costs, and how clearance certificates work — read our WSIB guide for Ontario trades.

What Commercial General Liability (CGL) Covers

CGL is the insurance policy that covers you when your work causes damage or injury to other people or their property. It's a private insurance product you buy through a broker or insurer.

A standard CGL policy for a contractor typically includes:

Bodily Injury to Third Parties

A visitor, client, or passerby gets hurt because of your work or your equipment. Examples:

A homeowner steps on a nail you left behind
A pedestrian is hit by debris from your work area
A client's tenant is injured by something you installed

Property Damage

You damage someone else's property during the course of your work:

You drop a tool through a skylight
Your excavation cracks a neighbour's foundation
A subcontractor on your crew damages a client's existing flooring

Completed Operations

This is a big one. Completed operations coverage protects you after you've finished the job and left the site:

A deck you built collapses eight months later
A plumbing installation leaks and causes water damage after you've moved on
Electrical work you did causes a fire weeks later

Without completed operations coverage, you'd be personally liable for every claim related to past work. Most CGL policies include this, but confirm it with your broker.

Products Liability

If you supply and install a product (fixtures, materials, equipment) and that product causes damage or injury, products liability covers the claim.

Personal and Advertising Injury

Less relevant for most trades, but this covers claims like libel, slander, or copyright infringement in your advertising.

Medical Payments

Minor medical expenses for third parties injured on or near your work site, regardless of fault. This is usually a small limit ($5,000-$10,000) meant to settle small claims quickly without going through a formal liability claim.

Why You Need Both

Here's the simplest way to think about it:

Scenario	WSIB	CGL
Your worker falls off a ladder and breaks a leg	Covered	Not covered
A homeowner trips over your tools and gets hurt	Not covered	Covered
You damage a client's drywall during a renovation	Not covered	Covered
Your apprentice develops hearing loss	Covered	Not covered
A deck you built last year collapses and injures someone	Not covered	Covered
Your worker gets carpal tunnel syndrome	Covered	Not covered
You accidentally cut a gas line at a client's house	Not covered	Covered

There is almost no overlap between the two. They're complementary. One without the other leaves a massive gap in your coverage.

And here's the practical reality: most general contractors won't hire you without both. If you can't produce a WSIB clearance certificate and a certificate of insurance showing active CGL coverage, you're not getting on the job.

Minimum Coverage Requirements

What Most GCs Require

The standard minimum for residential and light commercial work in Ontario:

$2,000,000 CGL per occurrence
Active WSIB clearance certificate

This is the baseline. If a GC asks for your insurance, this is what they expect to see.

Commercial and Institutional Projects

Larger projects — commercial builds, institutional work (hospitals, schools), government contracts — typically require higher limits:

$5,000,000 CGL per occurrence
Some projects require $10,000,000, usually achieved with an umbrella policy on top of a $5M base

If you want to work on bigger jobs, plan your insurance accordingly. Increasing your CGL limit from $2M to $5M is usually not as expensive as people think — often a few hundred dollars more per year.

Named as Additional Insured

Many GCs will also require that they be named as an additional insured on your CGL policy for the duration of the project. This means if a claim arises from your work, their interests are also protected under your policy. Your broker can add this with an endorsement — it's standard practice.

Additional Coverages to Consider

CGL and WSIB cover the big risks, but depending on your trade and the type of work you do, you may also need:

Professional Liability (Errors & Omissions): Covers claims arising from professional advice, design errors, or specification mistakes. Relevant if you do any design-build work, consulting, or engineering.
Tools and Equipment Insurance (Inland Marine): Covers your tools, equipment, and materials against theft, damage, or loss. Your CGL policy does not cover your own property — only other people's. If someone steals $15,000 worth of tools from your van, you need this coverage.
Commercial Auto Insurance: If you use a vehicle for work (and you do), your personal auto policy may not cover business use. Commercial auto covers your work vehicles, including liability and physical damage.
Umbrella / Excess Liability Policy: Sits on top of your CGL and provides additional limits. If you need $5M or $10M in coverage, an umbrella over a $2M CGL base is often cheaper than buying a $5M base policy outright.
Builder's Risk: Covers a building under construction against damage from fire, storms, theft, or vandalism. Usually purchased by the GC or property owner, but sometimes required of subs on larger projects.
Contractor's Pollution Liability: If your work involves any risk of environmental contamination — fuel tanks, asbestos abatement, mould remediation — standard CGL policies exclude pollution claims. You need a separate policy.

What CGL Costs

For small to mid-sized contractors in Ontario, CGL costs typically range from $400 to $1,500 per year for a $2M policy. The exact premium depends on:

Your trade — Roofers and demolition contractors pay more than painters or trim carpenters. Higher-risk trades mean higher premiums.
Annual revenue — Premiums are often calculated as a rate per $1,000 of revenue. More revenue means more exposure, which means higher premiums.
Claims history — A clean record keeps your rates low. One big claim can push premiums up significantly.
Number of employees — More workers generally means higher premiums.
Type of work — Residential vs. commercial, new construction vs. renovation, ground-level vs. high-rise.

For most small contractors — one to five employees, under $500K in revenue, doing residential work — expect to pay somewhere in the $500 to $1,000 range for $2M CGL.

That's a few dollars a day to protect yourself from a claim that could bankrupt your business. It's not optional.

How to Get CGL Insurance

Use a broker who specializes in construction insurance. This is not the same as calling your home insurance provider and asking them to add a business rider. Construction is a specialty line, and you want a broker who:

Understands the trades and the risks specific to your work
Has access to multiple insurers who write construction policies
Can advise on the right coverage limits and endorsements
Knows what GCs and project owners actually require
Can issue certificates of insurance quickly when you need them

Ask other contractors in your network who they use. A good construction insurance broker will save you money and make sure you're actually covered for the risks you face — not just sold the cheapest policy that leaves you exposed.

What you'll need to provide:

Business name, legal structure, and contact information
Description of work you perform
Estimated annual revenue
Number of employees
Claims history (past 5 years)
WSIB account number

Certificates of Insurance

A certificate of insurance (COI) is a one-page document issued by your insurer or broker that proves you have active coverage. It shows:

Your policy number and type of coverage
Coverage limits (per occurrence and aggregate)
Policy effective and expiry dates
Name of the insured (your business)
Additional insured parties (if any)
The certificate holder (usually the GC or client requesting it)

When You Need to Provide One

Before starting work for a new GC or client
At the start of every new project (some GCs request one per project)
When your policy renews (to confirm continuous coverage)
For permit applications on some municipal projects
When bidding on commercial or institutional work

Keep your COI ready to send at all times. Most brokers can issue a certificate within 24 hours, but some GCs want it immediately. The faster you can produce your paperwork, the more professional you look — and the faster you get to work.

A GC who requests your certificate of insurance and your WSIB clearance certificate before you start is doing things the right way. That's someone you want to work with.

The Bottom Line

If you're doing trade work in Ontario, here is the minimum you should have in place:

WSIB registration with an active clearance certificate
$2M CGL insurance (minimum) from a construction-focused insurer
Commercial auto insurance if you use any vehicle for business
Tools and equipment coverage to protect your investment in gear

WSIB and CGL are not interchangeable. They're not alternatives. They cover completely different risks, and having one without the other leaves you dangerously exposed.

Get both. Get them from people who understand construction. And keep your certificates current so you're ready to work when the opportunity shows up.

TradeBench connects Ontario trades and contractors with a trusted network of professionals who carry proper insurance and WSIB coverage. Verified credentials are part of what makes the network work. Learn more about TradeBench and how we're building a better way for trades to find and vet each other.

This article is for informational purposes only and does not constitute legal, financial, or insurance advice. Insurance requirements vary by trade, project, and jurisdiction. Consult a licensed insurance broker and/or legal professional for advice specific to your situation. Information is current as of the publication date and may change.