Builders risk insurance is one of the few line items on a construction budget that actually returns more than it costs. For 1-5% of your total project value, you protect materials, structures, and equipment from the moment ground breaks until the final inspection. Skip it, and a single loss event can sink your entire project.
This post breaks down the real numbers, shows you where the exposure lives, and explains why the premium is the cheapest money you’ll spend on any build.
The Cost vs. the Exposure
Premiums typically range from 1% to 5% of the total construction budget. A $1 million mid-sized project in Canada could see annual premiums between $10,000 and $30,000 depending on risk factors. Getcertain
Some standard one to two million dollar policies come in at $700 to $1,000 per project. APOLLO Insurance
Now compare that to what you stand to lose.
| Scenario | Typical Loss | Premium Paid (1-5%) |
| Site fire on a $1M residential build | $200,000-$500,000+ | $10,000-$30,000 |
| Theft of copper and materials | $25,000-$100,000+ | $5,000-$15,000 |
| Hailstorm damage to exposed structure | $50,000-$300,000 | $7,000-$20,000 |
| Vandalism during off-hours | $10,000-$75,000 | $3,000-$10,000 |
The premium is a fraction of one bad weekend on a job site. That’s the math.
Construction Theft Is Getting Worse, Not Better
If you think theft is a low-probability risk, the data says otherwise.
- Construction equipment and materials theft was a major problem in 2025 and early 2026, with copper reaching record highs near $8 a pound. ConstructConnect
- Calgary police reported 371 construction site thefts in 2025, up from 308 in 2024. The seven-year average prior was 277. CBC News
- An independent survey of 100 construction companies found they experienced an average of two thefts per year, with losses averaging $25,900 for licensed vehicles and $1,600 for tools. Aviva Canada
- In Canada, roughly $45 million in equipment and materials are stolen from construction sites each year. Mhccna
There is no Canadian entity that collects statistics drilling down into construction theft problems ConstructConnect, which means the real number is likely much higher.
Builders risk covers theft of materials and equipment on-site, including lumber, copper, appliances, and fixtures. Without it, you absorb every dollar of those losses yourself.
What a Builders Risk Policy Actually Covers
Here’s what your premium buys you:
- Structure under construction. Fire, wind, hail, lightning, explosion, vandalism.
- Materials on-site and in transit. Lumber sitting on a slab. Drywall in a trailer. Windows being shipped from the supplier.
- Equipment and temporary structures. Scaffolding, fencing, temporary shelters.
- Soft costs (optional). Legal fees, architectural costs, loan interest, and lost income caused by covered delays.
- Testing and commissioning coverage (optional). Damage during mechanical or electrical testing.
Flexible terms are available: 3, 6, 9, or 12-month policies depending on project length. Optional add-ons include earthquake, flood, soft costs, and testing coverage. Getcertain
For a deeper breakdown of coverage components, read Essential Coverage in Builder’s Risk Insurance.
What It Does Not Cover
No insurance product covers everything. Be clear on the gaps.
- Contractor liability or worker injuries. You need separate contractors liability insurance for that.
- Employee theft. Excluded unless you add Employee Dishonesty Coverage.
- Faulty workmanship. The cost to redo bad work is not insured, though resulting damage from that work may be.
- Earthquake and flood. Excluded on standard policies but available as endorsements, especially relevant in British Columbia and parts of Eastern Canada.
Knowing the exclusions is how you avoid surprises at claim time.
Three Scenarios Where It Pays for Itself
- The Toronto Construction Fire
In a Toronto suburb, a fire broke out at a residential construction site, causing significant damage. The builders risk insurance covered the cost of rebuilding damaged sections and replacing materials. Getcertain
A fire on a half-built home can easily generate $200,000+ in losses. The premium on that project was likely under $15,000.
- The Vancouver Equipment Theft
A construction site in Vancouver faced a major setback when expensive machinery was stolen. The builders risk policy provided compensation for the stolen equipment, keeping the project on track. Getcertain
Heavy equipment theft in B.C. is well-documented. One stolen excavator can cost $100,000+. The policy paid for itself on a single claim.
- The Calgary Hailstorm
A severe hailstorm in Calgary caused extensive damage to a commercial building under construction. The insurance policy covered the repair costs, which would have been a substantial financial burden otherwise. Getcertain
Alberta hail events are not rare. They are predictable. If your structure is exposed, your risk is real.
Who Needs This Coverage
You need builders risk if you fall into any of these categories:
- Property owners building a new home or commercial space
- General contractors managing ground-up construction
- Developers running multi-unit or commercial projects
- Renovators doing structural work, additions, or gut-and-rebuild jobs (see Builder’s Renovation Insurance for reno-specific coverage)
- Homeowners adding a second story, laneway suite, or major addition (see Residential Builders Risk)
Most lenders, municipalities, and large project owners in Canada demand proof of builders risk insurance before work can begin. Getcertain Even if no one requires it, the financial exposure makes the decision straightforward.
How to Keep Your Premium Low
You have some control over what you pay.
- Right-size the coverage period. A 3-month policy costs less than a 12-month one. Match the term to your actual build timeline.
- Choose a higher deductible. Typical deductibles run $1,000 to $2,500, adjustable based on project value. Getcertain Accepting a higher deductible drops the premium.
- Use fire-resistant materials. Wood-frame construction costs more to insure than concrete or steel.
- Secure the site. Fencing, lighting, cameras, and locked storage reduce theft risk, and some carriers offer discounts for documented security measures.
- Bundle with other coverages. Pairing builders risk with general liability or surety bonding through the same broker can lower your overall cost.
The Real Cost of Going Without
Here’s the scenario contractors don’t plan for.
You’re 60% through a $1.5 million commercial build. A weekend storm rips off the temporary roof. Water floods three floors. Materials are ruined. Structural work needs to be redone.
Without builders risk:
- You pay $300,000+ out of pocket for repairs and replacement materials
- Your project timeline extends by 8-12 weeks
- Your loan interest accumulates on the delay
- Your client may have penalty clauses for late completion
- Your reputation takes a hit
With builders risk:
- You file a claim
- The insurer covers repair costs, material replacement, and (if you added soft costs coverage) the extra loan interest and delay expenses
- You stay solvent
The premium was $15,000-$45,000. The loss was $300,000+. That’s a 7x to 20x return on a single event.
How to Get a Quote
The process is fast.
- Gather your project details: value, timeline, location, construction type, materials
- Request a builders risk quote from a broker who specializes in construction insurance
- Review the policy terms, exclusions, and optional endorsements
- Bind coverage before work begins
Most quotes are turned around within 24 hours after submission. Getcertain
Bottom Line
Builders risk insurance is not a cost. It is a transfer of risk from your balance sheet to an insurer’s. For 1-5% of your project budget, you protect the other 95-99%.
Construction sites are exposed to fire, theft, storms, and vandalism every single day. The losses are real, they are growing, and they are not covered by your general liability policy or your standard property insurance.
Get the coverage. Get it before you break ground. And make sure you’re working with a broker who understands construction risk inside and out.
For more on how builders risk works in Canada, read Understanding Builders Risk Insurance in Canada or Builders Risk Insurance Basics.
