Builder's Risk Insurance Ontario: Coverage, Exclusions, Timing

Construction Insurance

Builder’s Risk Insurance in Ontario: What It Covers, What It Excludes, When It Starts and Ends

A house under construction is the least protected thing you will ever own. It is wide open, full of material that fits in a pickup, and nobody sleeps there. Builder’s risk insurance is the tarp over the whole job: the structure, the material on site and, with the right endorsements, the material on the truck. This page is what the policy does, what it leaves out, when the clock starts and stops, and how a claim goes.

Written by a builder, checked November 2026. Policy wording differs by insurer; the forms described are the common Canadian ones. Costs are on the separate cost page.

One Policy, Two Names

Builder’s risk and course-of-construction (COC) insurance are the same thing; brokers and lenders use both names.

It is a property policy. It pays to repair or rebuild the physical work and material when a covered event damages it. It is not liability insurance (a separate policy, covered on the construction insurance hub), and it is not a warranty on the workmanship (that is Tarion or the contract). Assume property only unless the quote shows premises liability as its own line.

No Ontario law requires it. Your lender does, and a lender will not advance a draw without proof of insurance naming the lender. Who carries it on your job is a contract question, worked through on who pays for builder’s risk.

We build houses and carry these policies on every one of them; we do not sell insurance. The binding answer on any policy comes from a RIBO-licensed broker reading the actual form.

Named Perils or All-Risk: Read Which One You Bought

A named-perils form lists the events it covers; anything not on the list is not covered. An all-risk form covers every cause of physical loss except the ones it specifically excludes. All-risk is the usual form for a new house; named perils still turns up on some cheap quotes. Ask which it is before you compare prices.

Event	Usual position on a Canadian all-risk builder’s risk form
Fire, lightning, explosion, smoke	Covered. The core of the policy
Windstorm, hail, tornado	Covered, including the half-sheathed roof that takes off
Theft of material on site, vandalism	Covered, often with a higher deductible; forced entry or site security may be conditions
Water from inside the building (burst pipe, failed fitting)	Often covered to a limit with a higher deductible. One Ontario brokerage says almost never; another says to a limit. Read the form
Seepage, rain through an open wall for weeks	Excluded on most forms
Overland flood, sewer backup, earthquake	Excluded unless bought by endorsement
Materials in transit and stored off site	By endorsement or included, with sublimits
Soft costs (extra interest, permit renewals, re-drawn plans)	Optional endorsement; most forms leave them out
Faulty workmanship, design or defective material	Excluded as to redoing the bad work; resulting physical damage generally covered
Contractor’s tools and equipment	Not covered; the contractor’s own floater does that
Wear, settling, mould, mechanical breakdown, testing	Excluded; mechanical breakdown and testing can be bought back with equipment breakdown cover, the rest cannot

Common Canadian positions, checked November 2026. Each insurer’s form is its own document; the table tells you what to look for, not what yours says.

The Things People Assume Are Covered and Are Not

The framer’s tools. If the framer’s saws and compressor disappear from your garage overnight, that is his loss and his equipment floater. Your policy covers your house and your material, not his gear.

Windows sitting in the supplier’s warehouse. Material is covered on your site. At the supplier, on a truck or in the builder’s yard it is covered only with off-site and transit coverage, and only to the sublimit. We have watched material walk off sites; ask what the sublimit is before a big order sits anywhere but inside the house.

The plumber’s mistake. If a joint is soldered badly and the slab floods a week later, the policy generally excludes fixing the joint and generally pays for what the water did. That split comes from a 2016 Supreme Court of Canada decision on an all-risk policy. The joint is the plumber’s problem, the contract’s problem and, after possession on a contract home, Tarion’s.

Rain through an open frame. A storm that tears the tarps off and soaks the subfloor in one night is sudden damage. Rain in an open wall every week for two months is not. We have had weather get into open framing, and the fix was a crew and a dryer, not a claim form.

When the Clock Starts and When It Stops

The policy starts on the date it is bound in writing, not when the permit is issued and not when the excavator shows up. Never let a delivery or a trade on site before the policy is bound in writing. The first lumber drop on an uninsured lot is the usual way people end up self-insuring a stack of material they cannot afford to lose.

Policies run three, six, nine or twelve months and end at the earliest of expiry, completion or occupancy. Occupancy is the one that catches people: the night you first sleep in the house, most forms consider it occupied and the builder’s risk is finished. The builder’s risk vs home insurance page covers the switch and the gap week.

Winter shutdowns. A closed-in house that sits from December to March with nobody working is still under construction, and the policy stays in force until it expires. Some forms have a condition about work stopping for a set number of days, so tell the broker about a planned shutdown and get the answer in writing. Ask about freezing in an unheated building too; forms that cover it usually want the system drained or the heat on.

Extensions. Usually one is granted, at additional premium. Ask before the expiry date, not after. Better, buy a term longer than the schedule; a nine-month build gets a twelve-month policy. Check the schedule against the policy expiry at every draw.

How a Claim Works

The policy is the groceries; the certificate of insurance is the receipt. The adjuster wants to know exactly what was in the bag, so treat the site like a crime scene for a day.

Notify the broker the same day. Every form has a prompt-notice condition. Phone, then email for the timestamp.
Photograph everything before you touch it. The broken lock, the tire tracks, the water line on the drywall.
Secure the site. Tarp the roof, board the opening, shut the main. Reasonable emergency costs are usually recoverable; keep receipts.
Keep the evidence and report theft or vandalism to the police. Do not let a trade haul the failed fitting to the dump.
Meet the adjuster with paper. Invoices, delivery slips, the schedule, the contract and the percent complete at the date of loss.
Sign the proof of loss within the time the form gives. Missing it is a denial you handed them.
Expect the deductible off the top. A deductible is the part of the dent you pay for yourself. Four figures is normal on a house build, often higher on water and theft; the cost page has the ranges.

Why Claims Get Denied

Insurers deny claims for boring reasons far more often than dramatic ones, and every one below is avoidable.

The loss is outside the policy term. Before binding, after expiry, or after occupancy.
The cause is excluded. Seepage, flood without the endorsement, freezing where the form required heat or drain-down, settling, mould.
The claim is for the faulty work itself. Redoing a bad job is not a loss; the damage it caused is.
Misrepresentation on the application. It asked who manages the build, how far the fire hall is, whether there is a hydrant, whether licensed trades do the systems and whether you have been refused before. A wrong answer can void the policy. Never misdescribe a risk for a lower premium.
Late notice, a missed proof-of-loss deadline, or do-it-yourself plumbing and electrical where the insurer required licensed trades.
The item was never covered. The framer’s tools, the material still at the supplier, the soft costs you did not buy.

If a denial does not sit right, ask the insurer for the policy wording it relies on, in writing, and take it to the broker. Ontario brokers are licensed by RIBO, which has a complaints process; insurers are regulated by FSRA, which points consumers to the industry’s insurance ombudservice.

In plain words: this page is general information from a builder who carries these policies, not insurance, legal or tax advice. Policies differ, and the one that matters is yours. Confirm the details with a RIBO-licensed broker and with your lender before you rely on any of it.

Questions people ask

What is builder’s risk insurance?

A property policy that covers a building while it is under construction, along with the material on site to go into it. It pays to repair or replace the work when fire, wind, theft, vandalism or another covered event damages it. It is not liability insurance and not a warranty on workmanship. Course-of-construction insurance is the same policy under another name.

Is builder’s risk insurance mandatory in Ontario?

No Ontario law requires it. Lenders require it before the first construction draw, with the lender named on the policy, and a good contract settles who carries it before work starts. Building without it is legal; it is also how a half-framed house becomes entirely your own loss.

When should builder’s risk insurance begin?

Before anything is delivered to the site. The policy starts on the date it is bound in writing, not when the permit is issued or the excavator arrives. Get the binder, read the start date, then order material. Material on an uninsured lot is self-insured by whoever owns it, and on your lot that is usually you.

How long does builder’s risk insurance last?

Policies are written for three, six, nine or twelve months and end at the earliest of expiry, completion or occupancy. Usually one extension is granted at additional premium if the build runs long. Pick a term longer than the schedule; a twelve-month policy on a nine-month build is cheap compared with a gap.

Does builder’s risk insurance cover theft of lumber and building materials?

Yes, on the common all-risk forms, for material on your site. Expect a higher deductible for theft than for fire, and some forms require signs of forced entry or a locked site. Material at the supplier or in the builder’s yard is covered only with off-site coverage, to a sublimit. Report theft to the police and get the report number.

Does builder’s risk insurance cover water damage?

Sometimes. A sudden release from inside the building, such as a burst pipe, is often covered to a limit with a higher deductible, though one Ontario brokerage says water is almost never covered on these forms. Seepage, repeated rain through an open wall, overland flood and sewer backup are excluded unless bought by endorsement. Read the water wording.

Know what the policy should say before the broker does

The free calculator gives you a planning number for the premium and writes a quote request sheet describing your build, so two or three brokers of your choosing are quoting the same house.

Price my builder’s risk Back to the insurance hub

Sources and further reading

Tarion: what is not covered: the statutory warranty exclusions, including damage, homeowner-supplied work and alterations.
RIBO consumer fact sheet: brokers must be licensed by the Registered Insurance Brokers of Ontario, and how to complain about one.
FSRA: who regulates insurance in Ontario: the Financial Services Regulatory Authority of Ontario and the sectors it supervises.