Course of construction insurance in British Columbia
A building under construction is not yet a home or a business. It needs its own policy, from the first permit to the day someone moves in.
Nikki Tehara is a licensed BC insurance broker quoting course of construction insurance, also called builder's risk, for new builds and major renovations across all of British Columbia. The policy covers the structure, materials and fixtures while the work is under way, and it is arranged by phone, email and e-signature, with the lender and contractor named where the contract requires it.
What is course of construction insurance?
It is property insurance written for a building that does not exist yet, or is being changed so much that the existing policy no longer fits. It responds to physical loss or damage to the project while construction is in progress: the structure as it goes up, the materials and fixtures waiting to go in, and often materials in transit or in temporary storage off site. Insurers and lenders use the terms course of construction and builder's risk for the same thing.
The reason it exists is simple. A half-built house has no occupants, no finished roof, open framing, expensive materials stacked on site and a steady stream of trades coming and going. That is a different risk from a finished home, and standard home or commercial policies are not written for it.
What it typically covers
Wordings differ between insurers, so treat this as the general shape rather than your policy:
- The building or structure under construction, including foundations, framing and finishes as they are completed
- Materials, supplies and fixtures on site that are intended to become part of the project
- Materials in transit to the site and in temporary storage, on many policies within stated limits
- Loss from fire, lightning, theft, vandalism, windstorm, hail and many forms of water damage, subject to the policy terms
- Debris removal after a covered loss
- Soft costs such as additional interest and permit fees caused by a covered delay, where that extension is bought
What it commonly excludes
- Faulty workmanship, design or materials themselves, although resulting damage to other parts of the project is often covered
- Contractors' tools and equipment, which belong on the contractor's own policy
- Liability for injury to other people, which is a separate wrap-up or contractor's liability policy
- Earthquake and flood, unless specifically added, which is worth pricing on the coast
- Normal wear, settling, shrinkage and the cost of correcting defects
- Losses after the building is occupied or the construction period has run out without an extension
Course of construction in British Columbia: what actually matters here
- Start it before the first delivery. Materials arrive before the framing does, and a stack of lumber on an empty lot is a theft and fire risk from day one. The policy should be in force when the first truck arrives, not when the walls go up
- Who is named on it. Owner, general contractor, lender, and sometimes major subcontractors all have an insurable interest. Getting the named insureds right at the start saves a dispute later. The construction contract usually spells this out, so have it handy
- Renovation or new build. Adding to or gutting an existing building is treated differently from new construction, and the existing structure needs to be dealt with too. An existing home policy may restrict cover once the house is vacant or under major work, so both policies need to be looked at together
- Timeline and extensions. BC projects run long for all the usual reasons: permits, weather, trades. The construction period on the policy should be realistic, and the plan for an extension should be understood before it is needed
- The handover to permanent insurance. Cover ends at completion or occupancy. The home or commercial policy has to start the same day, and a lender will want proof. That handover is a thing to schedule, not to discover
- Wildfire and water. Interface locations, open framing in rainy season and unfinished roofs all shape underwriting. Site security, fencing, and whether anyone is on site overnight all come up in the questions
A note on owner-builders. If you are acting as your own general contractor under the BC owner-builder rules, say so. It affects which insurers will quote, what they want to know about who is doing the work, and how liability is arranged. It is placeable, but it needs to be described accurately.
What Nikki needs to quote you
The quote form asks for the details below. Rough figures are fine to start; anything unclear gets confirmed by phone.
- Project address and whether it is a new build or a renovation
- Type of construction (wood frame, concrete, steel) and the intended use once finished
- Estimated completed value, or the hard construction cost
- If a renovation, the value of the existing structure and what is being done to it
- Planned start and completion dates
- Who the general contractor is, or whether you are an owner-builder
- Whether there is a lender, and what the lender requires
- Site security: fencing, lighting, cameras, anyone on site overnight
- Whether you want earthquake, flood or soft costs priced
Common questions
What is course of construction insurance?
It is property insurance for a building while it is being built or substantially renovated. It covers the structure as it goes up, materials and fixtures on site, and often materials in transit or in temporary storage, against things like fire, theft, vandalism, wind and water damage. It is also called builder's risk. It is a different product from the home insurance that takes over once the building is finished and occupied.
Who buys it, the owner or the contractor?
Either can, and the contract between you usually says who must. On a custom home the owner frequently carries it with the contractor and lender named as insureds. On a renovation it depends on the scope. What matters is that someone holds a policy that names everyone with an insurable interest, so that a loss does not turn into an argument about whose insurer should pay.
Does my existing home insurance cover a major renovation?
Often not fully. Many home policies restrict or exclude coverage once a home is under substantial renovation, vacant during the work, or when the value being added is large relative to the existing building. Tell your insurer before the work starts. For bigger projects a course of construction policy on the renovation, alongside the existing policy, is the usual answer.
How long does the policy run?
For the stated construction period, typically a set number of months from the start date, and it can usually be extended if the project runs long. Coverage normally ends when the building is completed, occupied or put to its intended use, whichever the policy says comes first, at which point permanent insurance has to be in place. The gap between the two is where people get caught, so plan the handover.
Is wrap-up liability the same thing?
No. Course of construction covers the physical property. Wrap-up liability covers injury to other people and damage to their property arising from the project, for the owner and the contractors together. Larger projects often need both, and a lender or municipality may ask for both. Mention the project and Nikki will tell you what applies to yours.
What about soft costs if the project is delayed by a loss?
Extra interest, permit renewals, architect fees and similar costs that pile up when a loss delays completion are called soft costs. They are not automatically covered. Many policies offer them as an extension, and whether it is worth buying depends on the financing and the timeline. It is one of the questions Nikki will ask.
Related cover
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Start your course of construction quote
A few questions about the project, the timeline and who is involved, and Nikki takes it from there.
Start my quoteQuotes are estimates based on the information provided. Coverage is subject to underwriting and is not in force until confirmed in writing by a licensed broker.