Do seasonal contractors need to have year-round insurance? 

Roofers, landscapers, and bricklayers are among the many contractors whose demand surges during the summer but dwindles come autumn. If you run a seasonal contractor business, it may seem logical to consider insurance coverage only during your peak working months. 

However, most insurance providers require annual coverage rather than seasonal policies. Here’s why this matters. 

If your insurance policy extends to your warehouse or office space, as well as your assets, tools, and equipment, it’s wise to maintain coverage to safeguard them even during periods of inactivity. 

This remains relevant whether you operate from a home-based setup or store your tools and equipment in a garage or storage unit during winter. Unexpected incidents like theft, fire, or water damage can occur regardless of the season, and your tools and equipment are not only be costly, they are imperative to running your business. 

Commercial general liability insurance is an integral part of any contractor’s insurance policy, as it helps to protect them against claims of bodily injury or property damage resulting from their work. While most claims are more likely to arise during your active season, say you had completed a project at the tail-end of your busy season. A couple of months later, someone alleges that your work caused them severe injury. If you cancelled your policy, any compensation that person is entitled to or any legal fees that arise from a court case would have to come out of your own pocket.  

Contractors are held to rigorous standards due to their expertise, specialization, and industry regulations, making them accountable for various aspects of their work. In some instances, clients may insist the contractors have insurance coverage, regardless of provincial requirements.  

Ceasing coverage and then restarting it when work ramps up isn’t advisable for several reasons. Chief among these is that insurance companies view businesses with inconsistent insurance histories unfavourably. You’ll always be required to disclose your insurance history when buying a new policy, so your new insurer (or previous one, if you’ve elected to go with your insurance provider from last season) will recognize that there are lapses in your coverage. They may limit your choices in the type of coverage you can buy, requiring you to pay higher prices for your insurance or ask that you pay your full premium upfront. The longer you’ve been insured for, the better your rates will usually be – and having an inconsistent insurance history can act as a red flag for many insurance providers.  

If you have to pay your full premium upfront but still elect to cancel in the winter, you won’t be given a refund – no matter the reason. Your premium is based on a lot of things, mostly what kind of work you do and your company’s annual revenue, not just which months of the year you operate for.  

Having continuous coverage is always ideal. If a job pops up in the “off-season”, or you’re faced with a claim, it’s better to already have a policy in place instead of having to go through the process of getting insured again. You won’t need to do much more than review your policy each year (unless you’re considering shopping around for a better policy).  

Some insurance companies will offer seasonal business insurance, but very few. An insurance broker can help you look for options. This can be beneficial for businesses and seasonal contractors that work strictly during specific seasons, but it only covers you for the weeks or months that you’re in business for and leaves a big coverage gap. Again, you won’t be covered if your property is damaged or stolen, you won’t be covered for any claims that arise between jobs, and there’s no guarantee that a seasonal policy will be more affordable. 

In reality, insurance companies might increase premiums for seasonal businesses due to perceived risks, resulting in higher costs for potentially reduced coverage, creating a lose-lose scenario 

Everyone’s situation is different. We can’t tell you what’s best without getting to know you and your business. Chat with one of our commercial insurance brokers to learn more about what insurance is right for your seasonal contracting business. We can give you advice, help you shop around, and make suggestions. Plus, when the time comes around for renewal, we can help see if you’re still paying the best possible price for your policy or if it’s time to start looking elsewhere. 

Give us a call.