A construction project is one of the most financially exposed positions you can be in. Money is committed, materials are on site, trades are mobilized, and your standard commercial property policy isn’t covering any of it. The moment a project breaks ground, that exposure is real, and it stays real until the keys are handed over.
Builders Risk insurance, also called Course of Construction (COC) insurance, is the coverage built specifically for that window. At Core Insurance Group, we work with developers, general contractors, project owners, and builders across Calgary and Alberta to make sure that window doesn’t have a gap in it.
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Builders Risk is a named perils policy. It covers the specific losses listed in the policy wording, applied to the building under construction, materials staged on-site, and in many cases, materials in transit to the project. A well-structured program also covers the labour costs tied to repairing or rebuilding after a covered event.
The losses a Builders Risk policy is designed for include fire, theft, vandalism, windstorm, hail, and in some forms, water damage. In Alberta, those aren't abstract risks. Hailstorms can damage a partially framed structure in minutes. High winds during envelope installation are a legitimate job site hazard. Freeze events on exposed foundations happen every year somewhere in this province. The coverage is written the way it is for a reason.
The exclusions matter as much as what's included. Poor workmanship, design errors, and faulty materials are not covered under a Builders Risk policy. Equipment breakdown, including mechanical and electrical systems like HVAC, boilers, and electrical panels, is also typically excluded from the core policy. That gap can be addressed with a separate Equipment Breakdown endorsement, particularly during the testing and commissioning phase before handover.
If a covered loss forces a project delay, the financial hit goes well beyond the cost of physical repairs. Architects and engineers may need to redraw plans. Permits may need to be reissued. Financing carries additional costs while the site sits idle. On income-producing developments, delayed completion means delayed revenue. Soft costs coverage addresses these downstream expenses. Without it, you're absorbing a significant portion of the real financial impact out of pocket even if the physical damage itself is covered.
Anyone with money on the line during an active build needs to think seriously about this coverage
Course of Construction coverage applies to significant renovation and retrofit work, not just new builds. If an existing commercial property is undergoing a major upgrade or addition, the standard property policy on that building is unlikely to respond to losses that arise during active construction. A standalone COC policy, or a specific endorsement to the existing program, should be in place before trades start.
A GC coordinating multiple trades across a large commercial build has real financial exposure if the site takes a serious loss mid-project. Most construction contracts specify who is responsible for placing the Builders Risk policy. That needs to be resolved in writing before mobilization. We help general contractors work through their contract obligations and confirm that no coverage gap exists between their program and the owner's.
The developer carries the most concentrated risk on any project. The insured value on a Builders Risk policy needs to reflect the full replacement cost of the completed building, not the value of work done to date. If a project is nearly finished when a major loss hits, rebuilding from scratch costs roughly what the finished building would have cost. The policy limit has to reflect that reality before construction starts, not after something goes wrong.
Policies can be written on a project-specific basis, covering a single build from start to finish, or on an annual reporting form for developers and contractors running multiple projects at the same time. Which structure makes sense depends on your volume of work and how consistently active your project pipeline is.
One thing that catches people off guard: the insured value should reflect the completed replacement cost of the building, not whatever stage the project is at when coverage is placed. The logic is straightforward. If a project burns down a week before handover, the cost to rebuild it from scratch is the full replacement cost. The policy limit needs to cover that scenario from day one.
Coverage starts before construction begins and runs through to substantial completion, with options to extend through testing, commissioning, and the transition period before a permanent property policy takes over.
Yes, same coverage, two names. “Builders Risk” is the term most commonly used in commercial construction. “Course of Construction” or COC tends to be the language used in Alberta residential projects and smaller commercial builds. The protection they describe is the same.
Yes. A well-structured policy names all parties with an insurable interest: the owner, GC, subcontractors, and the lender financing the project. Having everyone on one policy removes the ambiguity about which program responds if something goes wrong on site.
Before any construction activity begins. Waiting until materials are already on site or framing is underway creates an uninsured window that can’t be closed after the fact. Some insurers won’t take on mid-project coverage at all, and those that will typically charge more because the site condition isn’t known from the start.
The core policy covers the building and materials. Contractor tools and equipment are generally handled under a separate Tools and Equipment policy. We coordinate both so there are no gaps between them.
The policy expires at substantial completion. A permanent commercial property policy needs to be in place to carry coverage forward from that point. We manage the transition between the two so the building isn’t sitting uninsured during the handover period.
If you have a project coming up or one already underway, let’s talk through the coverage. Reach out to Core Insurance Group
