# Mass timber construction is gaining ground: Why the insurance industry is still catching up  > Mass timber construction is moving into the mainstream, but insurance hasn’t kept pace. Learn how underwriters assess risk and how to improve insurability. Mass timber construction is increasingly being adopted across Canada, driven by sustainability goals, government incentives and design innovation. But while developer interest is accelerating, insurance underwriting has yet to align with this shift. Uncertainty around water damage, repair timelines and aesthetic restoration continues to complicate coverage and pricing, creating a disconnect between project ambition and insurability. With specialized expertise serving the construction industry across Canada, Acera Insurance’s Jonathan Livingstone provides his expert insights into how mass timber projects are insured today and what developers can do to navigate coverage requirements and underwriting expectations. For many developers, mass timber represents an opportunity to differentiate projects through sustainability, design and construction efficiency. However, as more projects move from concept to execution, insurance has emerged as a key friction point.   Limited claims history, uncertainty around repair outcomes and heightened concern over water damage mean coverage is often more complex than expected. As a result, insurance terms are shaped not just by design intent, but by fabrication practices, transportation controls, sequencing and contractor experience.  Developers who understand how insurers assess these factors and address them early are better positioned to secure coverage and avoid late‑stage pivots back to conventional materials.  What insurance coverage is required for mass timber construction? Mass timber construction does not introduce entirely new insurance requirements. The same types of coverage typical to other commercial projects would apply but the difference lies in how those policies are underwritten and structured. Insurers will take a more cautious approach, and custom wording may be warranted.  Builders’ risk (course of construction) Builders’ risk or course of construction insurance covers physical loss or damage during a building’s construction. For mass timber projects, insurers will pay particular attention to how elements are manufactured, stored, transported and protected on site. Water damage, off-site fabrication and aesthetic restoration are all issues that are subject to heavy negotiation in policy wording.  Commercial general liability (CGL) In the event your business is sued for causing injury or property damage, commercial general liability (CGL) covers legal expenses and any resulting judgments. On larger projects, CGL is often placed via an owner-controlled insurance program (OCIP) or contractor-controlled insurance program (CCIP), which consolidates coverage for all trades under one policy. Also known as wrap-up liability insurance, this ensures consistent limits and avoids coverage gaps.   Excess and umbrella liability If a serious claim exceeds the limits of your primary policy, excess and umbrella liability provides an additional layer of liability coverage. Higher limits are often required for mass timber projects because losses can be more complex and costly, particularly where exposed timber is part of the finished design. Professional liability (project‑specific or practice policies) Professional liability protects against claims that advice or services you provided caused financial losses. This is particularly relevant in mass timber construction where performance and long-term durability depends on moisture management, detailing or hybrid structural systems. Coverage may sit within a firm’s policy covering all projects or be arranged as a project‑specific policy for a single development. Delay in completion/delay in start‑up (DSU) This is often added to builders’ risk insurance, covering lost revenue or additional financing costs if a project is delayed by insured physical damage. The potential for delays is a heightened concern for mass timber due to long and unpredictable drying and repair timelines.  Why does mass timber construction require different insurance underwriting?  Mass timber construction presents a data challenge for insurers. With limited historical loss experience to draw on, underwriters must assess risk without the benefit of long‑term performance trends or well‑established claims patterns. This data gap means underwriting remains conservative, particularly around loss severity, remediation and durability over time.  Why carriers focus on water and fire Fire remains a significant concern, particularly where exposed or visual timber elements are integral to the design. While insurers generally understand how mass timber behaves in fire thanks to predictable charring characteristics, there is still uncertainty around post-fire damage, repair feasibility and the cost to remove and replace damaged components.   At the same time, water damage has emerged as a leading loss driver for mass timber projects during construction. Water can penetrate deeply into panels, become trapped and lead to latent damage that may not be immediately visible or easily assessed.  Why exposed aesthetics change loss severity  Unlike steel or concrete, mass timber often serves as both structure and finished surface. Water staining, checking or microbial growth may not compromise structural capacity but can still render panels unacceptable from an architectural standpoint. In these cases, relatively minor leaks can escalate into significant claims.   Why repair time uncertainty affects pricing  One of the biggest challenges for underwriting mass timber is the variables around remediation. Insurers struggle to model:  How long thick panels take to dry  Whether drying is acceptable versus replacement  Whether hidden moisture leads to future degradation  This lack of clarity increases loss severity assumptions, driving higher deductibles, the inclusion of sub-limits, or exclusions if risk controls are weak.    Builders’ risk insurance for mass timber construction: Coverage considerations  Unlike conventional construction, mass timber introduces exposures that begin long before installation and extend through the most vulnerable stages of construction. As a result, insurers place particular emphasis on early planning, clear policy wording and documented controls, all of which can materially affect how coverage responds and whether a project remains insurable on acceptable terms.  Aesthetic timber repair vs. replacement  Mass timber claims often hinge on whether insurers will pay for:  Sanding and refinishing  Panel replacement due to staining alone  This is policy‑specific and should be negotiated upfront with insurers, not after a loss. Off‑site fabrication and storage  Mass timber elements are frequently manufactured off‑site. Builders’ risk insurance must clearly extend coverage to:  Named fabrication facilities  Storage yards  Supplier locations  Insurers expect disclosure on how materials are protected, wrapped and kept dry while in storage before arriving on site.   Transit and staging exposure Property damage occurring during transportation and on‑site staging is common. Policies should address:  Inland marine extensions  Time limits on uncovered outdoor storage  Protective wrapping requirements  Temporary works and protection  Underwriters look closely at:  Temporary roofing or membranes  Sequencing that minimizes exposure  Active dewatering and monitoring during erection phases  Projects that minimize the duration of exposed timber tend to be viewed more favourably.  Water damage wording (vs. flood)  Builders’ risk policy wordings will typically distinguish between water damage (escape of water, rain ingress, sprinkler discharge) and flood (surface water, rising water, overflow of natural bodies). Insurers often apply sub-limits for flood or exclude it entirely unless coverage is specifically added with an additional premium. These terms should be clearly defined within the policy.  Delay in completion/delay in start-up (DSU) insurance triggers   DSU coverage only responds to insured physical damage. Moisture that delays construction but does not meet the policy’s damage threshold may not trigger coverage, reinforcing the importance of clear definitions in policy wording.  Water damage risk in mass timber construction and how insurers respond  During construction, mass timber elements are often exposed before the building is fully enclosed. Even when damage appears minor, moisture can delay construction, complicate repairs or affect finished surfaces, all of which can have insurance and schedule implications. As a result, insurers closely examine when and how timber is exposed to water, what controls are in place to limit that exposure, and how moisture issues would be identified and addressed if they arise.  Top causes of water losses on mass timber sites  Rain and snow during erection  Plumbing leaks and early system activation  Inadequate temporary weather protection  Trapped moisture beneath toppings or membranes    Highest‑risk construction phases   Panel installation before dry‑in  Roof and floor assembly prior to permanent membranes  Interior mechanical, electrical and plumbing (MEP) rough‑in before enclosure completion      Controls underwriters expect vs. prefer   Expected Formal Moisture Management Plan (MMP)  Defined responsibility and monitoring protocols  Sequencing that limits wet exposure  Preferred  Factory‑applied protection  Just‑in‑time delivery  Moisture sensors and documented readings   Bridging mass timber innovation and insurance industry expectations Mass timber construction presents meaningful opportunities for the construction industry, but insurance considerations continue to shape what is practical and achievable. Insurers assess risk across the full lifecycle of the materials, from fabrication and transport to installation and site protection. Developers who engage specialized insurance expertise early and align controls with underwriting expectations are better positioned to avoid delays and keep projects on track. Connect with an Acera Insurance advisor to discuss mass timber construction insurance strategies and risk management. FAQs Acera Insurance’s Jonathan Livingstone answers five questions about insuring mass timber construction.  Related reading  Claims lessons Canadian businesses can’t ignore after $11 billion in severe weather losses  Builder’s risk insurance: How to cover soft costs and avoid delays  Jonathan Livingstone is a Client Executive at Acera Insurance who specializes in insurance placements, program design and risk management for clients across the construction, real estate development and commercial sectors. Since joining Acera Insurance in 2022, he has worked closely with developers, contractors and business owners to structure insurance solutions that address complex operational risks and contractual requirements. Connect with Jonathan at 604.294.3773 or jonathan.livingstone@acera.ca  Information and services provided by Acera Insurance, Acera Benefits and any other tradename and/or subsidiary or affiliate of Acera Insurance Services Ltd. (“Acera”), should not be considered legal, tax, or financial advice. While we strive to provide accurate and up-to-date information, we recommend consulting a qualified financial planner, lawyer, accountant, tax advisor or other professional for advice specific to your situation. Tax, employment, pension, disability and investment laws and regulations vary by jurisdiction and are subject to change. Acera is not responsible for any decisions made based on the information provided.