To ensure that the financial investment of a construction project can be protected in the event of unexpected circumstances and project derailment, builders are required to obtain Builder’s Risk Insurance, also known as “Course of Construction” insurance.

In Canada, timber construction is utilized primarily in the residential market, with notable applications in low-rise industrial, institutional, and commercial buildings. The insurance rates for timber, classified as combustible construction, are generally much higher than that of non-combustible alternatives. Since timber applications have been consistent in the aforementioned markets, the associated insurance has not been substantial relative to overall project budget. However, with recent code changes and advancements in mass timber products, we can build larger and taller with timber than ever before, leading to changes in insurance rates as well.

The methodology for determining insurance rates for taller wood buildings is similar to that of low-rise builds. Combine that with the relatively new nature of these building typologies and the nuances of a stressed insurance market, we are seeing policies that are becoming a significant cost of the overall project budget.

This document is intended to support your timber builds by outlining practical steps to ensure that your application for insurance is favourable, and that your project is maximizing the potential to mitigate risk. Developed with the input of insurance stakeholders, we are confident that this insider insight will increase the success of your project.