Course of Construction Insurance in BC: Essential Protection for Builders and Owners
Safeguard Your Project from Start to Finish with Course of Construction Insurance
From foundation pour to final inspection, every construction project carries risk. Whether you’re a builder developing a commercial plaza in Kelowna or a property owner overseeing a custom home build, Course of Construction insurance is critical to protecting your investment while it’s still under development.
We understand how much planning, capital, and coordination go into every build. That’s why we offer flexible, comprehensive Course of Construction insurance policies to give builders and owners peace of mind from the moment ground is broken until the keys are handed over.
Key Takeaways
- Course of Construction insurance (also known as Builder’s Risk) protects against damage or loss during a building’s construction phase.
- Coverage can be arranged by the builder or property owner.
- The insured value should reflect the full replacement cost of the completed project.
- Wrap-up liability and equipment breakdown coverage may be included or purchased separately.
- Policies must be in place before construction begins for full protection.
What Is Course of Construction Insurance?
Course of Construction insurance, often referred to as Builder’s Risk insurance, is a specialized policy that covers the physical structure under construction, along with materials and fixtures, against loss or damage from events such as:
- Fire
- Theft
- Vandalism
- Explosion
- Wind or hail
- Accidental damage during construction
Without this coverage, an unexpected loss can devastate your project’s timeline and budget. Imagine an electrical fire destroying months of work — without the right protection, you may be left to absorb the entire cost of repair or rebuild.
Who Needs Course of Construction Insurance?
Any individual or company involved in a construction or major renovation project should consider this essential coverage. This includes:
- Property owners
- General contractors
- Developers
- Commercial landlords
- Custom home builders
At Kelowna Valley Insurance, we work with clients across the Okanagan and beyond, from small commercial renovations to multi-unit residential and industrial developments. Whether you’re overseeing a single build or multiple projects, we’ll ensure you’re covered every step of the way.
Who Can Purchase the Policy?
Course of Construction insurance can be purchased by either the:
- Property owner
- General contractor
- Or arranged jointly
Regardless of who initiates the policy, it typically includes the financial interest of both parties, along with subcontractors and other key stakeholders. Our experienced brokers will guide you through policy options to ensure that all parties are properly insured.
When Should the Policy Start?
The answer is simple: before construction begins.
Waiting until your project is already underway can result in coverage complications, premium surcharges, or ineligibility for certain protections. Insurers price these policies based on the full timeline and scope of the build. A delay in securing coverage could mean gaps in protection—or no coverage at all.
Start your policy before the shovel hits the ground. Our team can help you plan accordingly to avoid interruptions or exposure to risk.
What’s Covered Under a Course of Construction Policy?
Typical Course of Construction insurance policies include protection for:
- Building materials stored on- or off-site
- Structure and fixtures under construction
- Labour costs and value of work completed
- Soft costs like financing, permits, and fees (when added as an endorsement)
We’ll help you assess the correct replacement cost value of your project to ensure your coverage limits are sufficient in the event of a total loss.
Add-Ons and Related Coverages to Consider
1. Wrap-Up Liability
A wrap-up liability policy covers all parties involved in the project — owner, general contractor, subcontractors, consultants — under one umbrella. It simplifies paperwork and ensures everyone has consistent liability protection in the event of a third-party injury or property damage.
Benefits include:
- Dedicated coverage limits for the project
- Simplified claims process
- Fewer gaps in liability coverage
- Reduced administrative burden
2. Equipment Breakdown Insurance
Standard builder’s risk policies often exclude mechanical breakdown. Construction equipment, HVAC systems, electrical systems, boilers, and other mechanical components are vulnerable to sudden failure — especially during testing and commissioning.
Project Equipment Breakdown Insurance bridges that gap by covering:
- Accidental breakdown
- Electrical failures
- Pressure system damage
- Resulting delays in completion
This coverage can be especially important on commercial and industrial builds with high-tech systems or complex infrastructure.
Why Replacement Cost Matters
Course of Construction insurance is written on a replacement cost basis, meaning it pays to rebuild or restore the project based on current construction costs — not market value or depreciated value.
To avoid being underinsured, you’ll want to:
- Accurately estimate the completed project value
- Include costs for materials, labour, and soft expenses
- Consider inflation or rising construction costs
We’ll help you arrive at a realistic replacement value so your project is fully protected, even in a worst-case scenario.
Real-Life Example
Imagine your commercial warehouse project in Vernon is 85% complete when a fire damages the interior framework. Without Course of Construction insurance, you’re on the hook for the entire rebuild — likely hundreds of thousands of dollars. With the right policy in place, your insurer covers the loss, and your project stays on track.
Common Questions About Course of Construction Insurance
Q: Is Course of Construction insurance mandatory?
A: Not legally, but it’s often required by lenders, municipalities, or contract agreements.
Q: Does it cover liability?
A: No — unless you add wrap-up liability. Course of Construction protects physical property.
Q: Can I add coverage mid-project?
A: It’s best to start before construction begins, but some insurers may approve mid-project coverage, often with higher premiums.
Q: What happens if materials are stolen from the site?
A: Theft is typically covered, as long as proper site security and storage protocols are followed.
Q: Does the policy end when the building is completed?
A: Yes, or when the building becomes occupied. It transitions into a standard commercial or property insurance policy at that point.
Get a Tailored Quote from Kelowna Valley Insurance
For over 40 years, Kelowna Valley Insurance has been helping BC residents and businesses navigate the complexities of construction and property coverage. We’re your local experts — whether you’re developing a retail strip north of the city or a custom home on the lake.
We’ll walk you through:
- Project timelines and estimated values
- Required coverages and exclusions
- Additional options like wrap-up liability or equipment breakdown
- Policy start dates and documentation
We work with both private markets and trusted national insurers to get you the right protection at competitive rates.
Let’s Build Something Great — And Protect It
At Kelowna Valley Insurance, we help you focus on your build while we handle the risk. Every project is different — and so is every policy. We’re here to answer your questions, compare options, and ensure your Course of Construction insurance is built for success.
Contact us today or visit one of our two convenient Kelowna locations — in Orchard Plaza or Glen Park Village — and speak to a broker who understands construction, risk, and your bottom line.
