Mandatory insurance rules for transportation and construction businesses in Ontario originate from: provincial law, municipal by-laws, trade regulators and, contracts that put vehicles on the road and crews on job sites.  

The coverage you should carry depends on your risks, which an insurance advisor can help you assess. The coverage you must carry depends on how and where your vehicles are used, which trade you practice, whether you employ others, and what your clients and licensing authorities demand.

The stakes here are physical as much as financial. A delivery van in a collision, a passenger injured in a rideshare, or faulty wiring that burns down a home can produce claims few small operators could pay out of pocket. Yet many go without insurance, whether to save on premiums, because a policy lapsed, or because they never told their insurer that a personal vehicle now makes deliveries. The absence of coverage usually surfaces only after a loss, when a claim is denied, or a licence suspended.

Beyond coverages discussed below, most businesses with employees also need workplace insurance from the Workplace Safety and Insurance Board.  

What auto insurance is mandatory for every vehicle in Ontario? 

Auto insurance needs in Ontario vary according to a number of factors, but every registered vehicle, regardless of who owns it or how it’s used, must carry four coverages: 

• Third-party liability (minimum $200,000): Covers the driver or vehicle owner when they are at fault for injury to another person or damage to someone else’s property. 
• Accident benefits: Although several types are available, the only mandatory accident benefits cover medical, rehabilitation, and attendant care costs for the driver and any passengers injured in an accident, regardless of who is at fault. Benefit minimums vary by injury. As of July 1 reforms, accident benefits covering income replacement, home support, and end of life costs, among others, have become optional. 
• Uninsured automobile (minimum $200,000): This covers damage to your vehicle and injury to you and your passengers when you’re in an accident with an uninsured automobile whose driver is at fault. 
• Direct compensation for property damage (DCPD): Covers damage to your vehicle when another driver is at fault, paid by your own insurer. It applies only when the other vehicle is identified and insured in Ontario where the collision occurs. 
  • Payouts are proportional to the other driver’s fault: if they’re 70% at fault, DCPD covers 70% of your damage, and collision coverage, if you have it, picks up the rest. DCPD is included by default, but since 2024 owners can opt out by signing the OPCF 49 endorsement. Doing so also drops collision coverage, and most lenders won’t allow it. But as a vehicle is used for business or commercial purposes, those requirements can change. In most cases, mandatory insurance minimums are determined by how and where you use a commercial vehicle. 

Learn more: Professional vs. general liability insurance: What coverage does your business need?

What is the difference between personal, business, and commercial use?

Insurers set coverage based on vehicles usage for personal, business, or commercial purposes:

• Personal use includes driving for personal, social, and domestic purposes, and is covered by a personal auto policy.
• Business use involves driving your personal vehicle for employment purposes such as client visits, sales calls, or transporting work materials. Insurers consider the nature and degree of business use and decide whether this usage can be covered by your personal auto policy, an extension to it, or requires a standalone commercial policy.
• Commercial use means the vehicle is used primarily for hire, compensation, or delivery purposes and requires a commercial auto policy irrespective of whether the activity is profitable.

Apart from those distinctions, there are no fundamental coverage differences between commercial and personal auto insurance, says Gordon Allen, Rates.ca commercial insurance expert and licensed insurance broker. “If you were in an accident with a commercial vehicle, collision coverage would fix the damage and rental-vehicle coverage would provide a rental vehicle—it’s the same kind of coverage.”

What’s different is the rating which influences your premium. “You’re rated for the area you’re driving in, the type of vehicle you’re driving and the type of work you’re doing when driving the vehicle,” says Allen. “That’s what makes a policy commercial versus personal.”

Related: What is the difference between Claims-made and Occurrence insurance for your business?

What are mandatory insurance requirements for select transportation businesses?

Here are the key auto insurance mandates for some major transportation segments in Ontario:

Taxicabs and limousines: These services are licensed at the municipal level, so their insurance requirements can vary by location. The City of Toronto’s rules are typical of most municipalities: the owner of the taxi or limousine must have at least $2 million in coverage for bodily injury or death, damage to property resulting from an accident, and third-party liability.

Rideshares (e.g., Uber, Lyft): Like taxis and limousines, ridesharing services are regulated at the municipal level. However, the Financial Services Regulatory Authority of Ontario (FSRA) has simplified requirements by approving a single insurance package and provider for each ridesharing service, also known as a private transportation company (PTC).  

Uber drivers, for instance, must be covered by the dedicated Uber policy offered exclusively by Economical Insurance. Lyft drivers must obtain a dedicated policy from Aviva. Generally, coverages are similar across insurers:

• App on, able to accept rides: $1 million in third-party liability, accident benefits for the driver, and contingent collision and comprehensive coverage.
• Ride accepted, en route to or transporting a customer: $2 million in third-party liability, accident benefits for the driver and passengers, and contingent collision and comprehensive coverage.
• App off: No PTC coverage; your personal auto policy is in effect.

The good news is that PTCs arrange this coverage at no cost to drivers. But drivers may need to notify their personal auto insurer of this additional use of their vehicle.

Independent couriers and food-delivery drivers (e.g., Amazon Flex, SkipTheDishes): Insurance requirements for these gig workers, who typically use their personal vehicles, depend on the delivery network. Amazon Flex and Uber Eats drivers, for instance, are covered during pickups and deliveries by an FSRA-approved insurance package built into their contracts. Drivers for other services, such as SkipTheDishes, should secure additional coverage for their delivery work or risk having any on-the-job claims denied.

Dedicated delivery and cargo transportation services: With some exceptions, Ontario’s Carriage of Goods regulation requires every vehicle used to transport goods for a fee to carry enough liability insurance to cover goods lost or damaged during carriage. Since some loads are worth far more than others, the vehicle owner must determine value of goods transported and appropriate amount of coverage required.

Comparative breakdown of insurance required by various types of transportation businesses:

What insurance must construction businesses carry?

When things go wrong in the construction sector, people and property can suffer a lot of damage. Most claims against construction businesses and tradespeople are covered by a combination of workplace insurance from the Workplace Safety and Insurance Board (WSIB) and commercial general liability (CGL) insurance, which is provided by private insurers.

All construction businesses must register with the WSIB and pay premiums for each of the workers they employ directly, including self-employed workers. WSIB insurance covers medical expenses, lost wages, and rehabilitation for injuries and illnesses acquired on the job.

CGL typically covers a wide range of third-party claims arising from business operations. Some construction scenarios typically covered by CGL include:

• Damage to a property next to construction site
• An injury to a non-employee who visits construction site
• A flaw in construction work that results in a future failure, such as a fire caused by faulty wiring

CGL will also cover legal costs. Unlike the professional liability mandates covered in the first article of this series, however, most CGL requirements in construction are set by project contracts and municipal licensing authorities rather than by provincial regulators.

Read more: Do I need business insurance if I already have WSIB in Ontario?

What are the mandatory insurance requirements for select construction trades?

Here are the key insurance mandates in some major construction categories:

General contractors: The insurance needs of general contractors are usually defined by individual project contracts rather than by laws or licence requirements. It’s common for private and public developers to demand coverage of at least $2 million for residential and small commercial projects. Minimum coverage required increases as construction projects grow in size and risk.

However, subcontractors do most of the work on construction projects, which exposes general contractors to added risk. “If you hire me to build you a house and my electrical subcontractor screws up and burns down the house, you’re going to blame me because you hired me,” Allen explains. “I’m ultimately responsible.”

Hence general contractors typically require subcontractors to provide proof of adequate insurance and to name the general contractor as an additional insured party on the subcontractor’s policy. This arrangement allows at least part of a claim to be covered by the subcontractor’s insurance. It also spares the general contractor potentially prohibitive premiums on large projects by spreading the insurance load across all of the contractors working on the project.

Electrical contractors: Anyone licensed to operate an electrical contracting business must have public liability and property damage insurance coverage of at least $2 million as a condition of their Electrical Safety Authority licence. Electricians who are employees of electrical contractors must be covered by their contractors’ policy, while electricians who work as independent contractors must have their own liability and WSIB coverage.

HVAC contractors: Although the province doesn’t require HVAC contractors to have insurance beyond WSIB coverage for their workers, CGL is mandated by some municipal licensing authorities and is commonly required by general contractors. The typical minimum is $2 million in coverage.

Comparative breakdown of insurance required by various types of construction businesses:

Whether you drive for a living or build for one, Ontario law sets a floor for insurance requirements, while municipal licensing offices, delivery platforms, developers, and general contractors can add on incremental coverage needs.

Understanding rules governing commercial insurance requirements for transportation and construction industries can help prevent significant financial losses if faced with a claim on the road or at a building site.

Related: Certificate of insurance (COI): What is it and do you need one?

Frequently asked questions (FAQs)

1. Does my personal auto policy cover me if I deliver food or drive for a rideshare on the side? 

   Generally no. Personal auto policies exclude commercial use, and you’re required to tell your insurer about any change in how you use your vehicle—including rideshare or delivery work—regardless of what coverage the platform provides. Uber, Lyft, and a few others carry FSRA-approved commercial policies that cover you while the app is on, but those are layered on top of a valid personal policy, not a substitute for it. Contact your broker before you start; they can confirm whether your policy covers commercial activities or whether you need an endorsement or commercial policy.

2. I’m a self-employed tradesperson with no employees. Do I still need WSIB coverage?

   If you work in construction, yes. Ontario’s expanded compulsory coverage rules require independent operators, sole proprietors, partners, and executive officers in the construction industry to register with the WSIB and pay for premiums. There are limited exemptions, such as insurance for home renovation work paid for directly by the homeowner.

3. A general contractor is asking me to name them as an additional insured on my policy. What does that mean?

   By adding your general contractor to your insurance, your commercial general liability (CGL) policy will cover claims made against the general contractor that arise from your work on the project. It’s a standard request on Ontario job sites. Most insurers will add an insured endorsement for a modest premium or no charge. Without it, your contractor may not allow you to start work.