What insurance does a construction project need?

Most projects need builder's risk insurance on the work and materials, liability for everyone on site through each contractor's general liability or a project wrap-up, and contractors' equipment, pollution and auto coverage. Owners with financing add soft costs and delay in start-up. Public and larger private projects often require performance and labour and material payment bonds. The contract decides who buys each piece.

Who buys builder's risk insurance, the owner or the contractor?

The contract decides. Under CCDC 41, the contractor arranges broad form property insurance at 1.1 times the contract price plus owner-supplied products and design services. On other projects the owner buys it and the contractor relies on that policy. Either way, every party should see the wording and deductible, because a deductible can be charged back to whoever caused the loss.

What are the CCDC 41 insurance requirements?

CCDC 41 (2020) requires general liability of $10,000,000 per occurrence with a $10,000,000 completed-operations aggregate, $10,000,000 auto liability, broad form property at 1.1 times the contract price, boiler and machinery cover for the work, all risks contractors' equipment, $5,000,000 pollution liability and drone liability if drones are used. Owners often amend it, so the contract controls.

Do I need a licence to build a new home in Ontario?

Usually, yes. The Home Construction Regulatory Authority says builders and sellers of new homes must be licensed, and a builder of contract or custom homes on the owner's land must be licensed as both vendor and builder. A person building a home for their own use may not need a licence if they do not sell it. Renovations of existing homes typically do not require one.

Are bonds required on construction projects in Ontario?

On public contracts of $500,000 or more, Ontario's Construction Act requires the contractor to furnish a performance bond and a labour and material payment bond, each for at least 50% of the contract price. Private owners can require bonds in their contracts at any size. A bond guarantees performance to the owner and is backed by the contractor's own indemnity to the surety.

Does an owner need a WSIB clearance from its contractor?

In Ontario, a principal that directly retains a contractor for construction work must obtain a WSIB clearance certificate, and an owner or developer hiring a builder is a principal. Without a clearance, the principal may be liable for the contractor's unpaid premiums. A householder hiring a contractor only for exempt home renovation work is outside this policy.

How is construction project insurance priced?

Builder's risk is priced on the completed project value, construction type, duration, location, site security and fire prevention, with wood frame rated higher than non-combustible buildings. Deductibles and extensions such as soft costs, delay and flood change the price. Wrap-up liability is rated on construction value, trade mix and the completed-operations period. The builder's experience and claims record matter to both.

Construction & Trades

Construction Project Insurance in Canada

Insurance for the project itself, set up to match the contract from ground-break to occupancy.

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In short

A construction project in Canada usually needs builder's risk (course of construction) insurance on the work itself, liability for everyone on site through each contractor's CGL or a project wrap-up policy, and contractors' equipment, pollution and auto cover. On CCDC contracts, CCDC 41 sets the minimums, including broad form property at 1.1 times the contract price. Owners and developers add soft costs, delay in start-up and surety bonds.

Last reviewed October 27, 2026

Contract price multiple for broad form property (builder's risk) in CCDC 41 (2020): 1.1x; Contract price multiple for broad form property (builder's risk) in CCDC 41 (2020)
General liability per occurrence and completed-operations aggregate in CCDC 41 (2020): $10M; General liability per occurrence and completed-operations aggregate in CCDC 41 (2020)
Ontario public contract size at which performance and payment bonds are required (Construction Act): $500,000; Ontario public contract size at which performance and payment bonds are required (Construction Act)
Canadian insurers we compare for construction projects and builders: 17; Canadian insurers we compare for construction projects and builders

Construction insurance at the project level protects what each trade's policy doesn't: the building while it is being built, the liability of everyone on one site, and the money tied up in the schedule. Builder's risk covers the work and materials. A wrap-up can put every contractor under one liability policy. Soft costs and delay in start-up protect the owner's financing and rent.

We work with owners, developers, custom home builders, construction managers and general contractors to set up the program the contract calls for, often CCDC 41, and to keep it right through change orders and handover. For trade-level cover, see our contractor insurance guide, and for the full sector, construction and contractor insurance.

What the package includes

Builder's risk (course of construction) at the contract value
Soft costs and delay in start-up for owners and developers
Wrap-up liability covering all contractors on a project
Boiler and machinery cover for testing and commissioning
Contractors' equipment floaters with owner waivers of subrogation
Contractors' pollution liability
Performance, labour and material payment, and bid bonds
Owner's general liability during construction

Project insurance versus trade insurance

Every contractor carries its own insurance for its own business: liability, tools, vehicles. That is covered in our contractor insurance guide. Project insurance is different. It is bought for one building or job, it names the parties to that job, and it ends when the project is finished or occupied.

Three things need insuring on a project. The work itself, which can burn, flood or be stolen before anyone moves in. The liability of everyone on site to the public, neighbours and each other. And the money behind the job: financing costs, rent or profit lost to a delay, and the guarantee that the contractor will finish and pay its subs. Who buys each piece is set by the contract, not by habit. For the wider sector, including trade-by-trade coverage, see construction and contractor insurance.

Who buys what: owners, developers, builders and construction managers

The parties to a project each carry different pieces. The table shows the usual split. The contract can change any line, so read it before assuming.

Typical insurance responsibilities on a construction project
Party	Usually arranges	Also needs
Owner or developer	Builder's risk when the contract makes it the owner's job, soft costs and delay in start-up, a wrap-up on larger projects	Its own CGL as owner, residential surety for development agreements and deposits
General contractor (stipulated price)	Broad form property and $10M CGL under CCDC 41, contractors' equipment, pollution liability, bonds when required	Certificates and WSIB clearances from every sub
Construction manager	Depends on the CCDC 5A or 5B form chosen and the owner's amendments	Professional liability where it gives advice the owner relies on
Custom or contract home builder	Builder's risk for the house, CGL with completed operations	In Ontario, a new home builder licence and warranty enrolment
Trade contractors	Their own CGL, tools and auto; installation floater for their work	Coverage matching the GC's or CM's subcontract terms

Builder's risk: insuring the work before it exists

Builder's risk, also called course of construction, covers the project while it is being built or renovated: the work, materials on site, in transit and in storage, and temporary works, against fire, theft, vandalism, windstorm and other insured damage.

CCDC 41 (2020) requires broad form property with a limit of at least 1.1 times the contract price plus the value of owner-supplied products and design services, a deductible no higher than $10,000, and coverage no less than IBC Forms 4042 and 4047. It also requires boiler and machinery insurance on permanent or temporary boilers and pressure vessels forming part of the work, including hot testing and commissioning. That last item is often missed on mechanical-heavy projects.

Set the limit from the contract, not an early estimate, and update it with change orders. Statistics Canada's non-residential building construction price index rose 3.5% year over year in the second quarter of 2026, so an old number can leave a rebuild short. Owners with financing or tenants waiting should add soft costs and delay in start-up. Our post insuring the project before it exists covers start dates and occupancy.

Wrap-up liability: one policy for everyone on site

On larger projects, liability is often arranged as a wrap-up: a single project-specific commercial general liability policy that covers the owner, general contractor or CM and all subcontractors for work on that site, with a completed-operations period after the project ends.

It removes most cross-claims between contractors on the same site, because they share one policy and one defence.
It gives the owner control over the limit and the insurer, instead of relying on a dozen certificates.
It only covers that project. Each contractor still needs its own CGL for other work, plus its own auto, tools and employer's liability.
Contractors bidding a wrapped project should ask whether they must exclude the wrap-up cost from their price, and confirm their own CGL will not respond on that site.
Check the completed-operations period. It should run long enough for defects to appear, and it must be paid for up front because the policy ends with the project.

CCDC contracts and their insurance schedule

Most Canadian commercial and institutional projects use Canadian Construction Documents Committee forms. The form decides the relationship. CCDC 41, CCDC Insurance Requirements, sets the insurance.

Common CCDC forms and the insurance questions each raises
Form	Use	Insurance question to settle
CCDC 2 (2020) Stipulated Price Contract	Owner and general contractor, fixed price	The contractor usually carries CCDC 41 coverage; confirm any owner amendments
CCDC 3 (2016) Cost Plus Contract	Owner and contractor, cost plus a fee	Whether insurance premiums and deductibles are a reimbursable cost
CCDC 4 (2023) Unit Price Contract	Work measured and paid by unit	Builder's risk limit as quantities change
CCDC 5A and 5B (2010 and 2025) Construction Management Contracts	CM for services, or for services and construction	Whether the CM or the owner buys project insurance, and the CM's professional exposure
CCDC 14 (2013 and 2026) Design-Build Stipulated Price Contract	One firm designs and builds	Professional liability for the design, which CGL excludes
CCDC 17 (2010 and 2025) Trade Contractors on CM Projects	Trade contractors hired under a CM	Flow-down limits, additional insured status and wrap-up participation

CCDC 41 (2020) also asks for $10,000,000 auto liability, all risks contractors' equipment with no subrogation against the owner (see tools and equipment), $5,000,000 contractors' pollution liability and $5,000,000 drone liability if drones are used. Owners often amend it or attach an older edition, so send us the insurance section before tender close. Our post on why contracts ask for a certificate of insurance covers additional insured and notice wording.

Project claims and the policy that responds

These scenarios are hypothetical. They show how the pieces of a project program fit together, and where gaps appear.

Hypothetical project losses and the responding policy
Hypothetical scenario	Loss	Policy that responds
Temporary heat starts a fire at 70% complete	Damage to the work and a five-month delay	Builder's risk for the rebuild; soft costs and delay in start-up only if bought
Copper wire stolen from an unfenced site over a long weekend	Theft of materials	Builder's risk, subject to its security conditions and deductible
A crane load strikes the neighbouring building	Third-party property damage	The contractor's CGL or the project wrap-up
A boiler fails during hot testing and damages the mechanical room	Damage during commissioning	Boiler and machinery cover, which CCDC 41 requires for the work
Tenants move into the ground floor before the policy is changed	Coverage ends on occupancy	Possibly nothing; arrange permanent property cover before anyone moves in
The general contractor fails halfway through	Cost to complete and unpaid subs	Performance and labour and material payment bonds, if they were required

Ontario rules every owner and builder should know

Several statutes put insurance and security obligations on the parties to a project. These are the Ontario rules we see most. Other provinces have their own lien, warranty and workers' compensation regimes, and we confirm the rules for each project's province.

Bonds on public work: under Ontario's Construction Act, a contractor on a public contract of $500,000 or more must furnish a performance bond and a labour and material payment bond, each at a minimum of 50% of the contract price. Our post on surety bonds for contractors explains each bond.
Holdback: each payer must retain 10% of the price of services or materials as they are supplied, until lien rights expire or are dealt with.
WSIB clearances: a principal that directly retains a contractor for construction work must obtain a WSIB clearance certificate. An owner or developer hiring a builder is a principal. Without a clearance, the principal may be liable for the contractor's unpaid premiums. Clearances last up to 90 days and are renewable.
New homes: the Home Construction Regulatory Authority says builders and sellers of new homes must be licensed, and a builder of contract or custom homes on the owner's land must be licensed as both vendor and builder. A person building a home for their own use may not need a licence, provided they do not sell it. Developers should also see our residential surety guide.

Handover, occupancy and completed operations

The riskiest day for a project program is often the day the building starts being used. Builder's risk typically ends at completion, acceptance or occupancy, and some wordings end it when any part of the project is used for a purpose other than construction. The owner's permanent commercial property policy must start the same day.

Liability shifts too. Once the work is handed over, injury or damage caused by it falls under completed operations. CCDC 41 sets a separate $10,000,000 completed-operations aggregate for that reason. Builders and contractors should keep that coverage in place for as long as their contracts require, and owners should hold a certificate of insurance showing it.

What project insurance costs: the rating logic

Builder's risk is priced on the completed value of the project, its construction type, duration and location. Wood frame costs more than non-combustible construction. Site security, fire prevention, hot work permits, temporary heat management and water damage controls all move the rate, as do the deductible and any soft cost, delay or flood extensions.

Wrap-up liability is rated on the construction value and the mix of trades, with a completed-operations period paid for up front. A trade contractor's own CGL is rated on revenue or payroll. Experience counts: insurers want to see the builder's track record on similar projects, its subcontractor controls and its claims history. Marsh reported Canadian commercial property rates down 8% in the third quarter of 2026, which helps project buyers, but underwriters still price wood frame and long projects carefully.

How we build a construction project insurance program

1Read the contract: we review the CCDC form, CCDC 41 or the owner's insurance schedule, and any amendments, before tender close if possible.
2Allocate responsibility: we confirm who buys builder's risk, whether a wrap-up applies, and what each trade must carry.
3Value the project: we set the builder's risk limit from the contract price and owner-supplied items, and calculate soft cost and delay limits.
4Check the rules: we confirm bonding, holdback, WSIB clearance and new home licensing requirements for the project's province.
5Market it: we take the submission to the insurers on our panel of 17 whose appetite fits the project and compare wordings on occupancy, testing and theft, not just price.
6Manage handover: we track change orders, extend the term if the schedule slips, and line up permanent property cover before occupancy.

Good to know

Frequently asked questions

What insurance does a construction project need?: Most projects need builder's risk insurance on the work and materials, liability for everyone on site through each contractor's general liability or a project wrap-up, and contractors' equipment, pollution and auto coverage. Owners with financing add soft costs and delay in start-up. Public and larger private projects often require performance and labour and material payment bonds. The contract decides who buys each piece.
Who buys builder's risk insurance, the owner or the contractor?: The contract decides. Under CCDC 41, the contractor arranges broad form property insurance at 1.1 times the contract price plus owner-supplied products and design services. On other projects the owner buys it and the contractor relies on that policy. Either way, every party should see the wording and deductible, because a deductible can be charged back to whoever caused the loss.
What is wrap-up liability insurance?: A wrap-up is a single general liability policy bought for one project that covers the owner, the general contractor or construction manager, and all subcontractors for work on that site, with a completed-operations period afterwards. It reduces cross-claims between contractors. It does not replace each contractor's own policy for other jobs, vehicles, tools or employer's liability.
What are the CCDC 41 insurance requirements?: CCDC 41 (2020) requires general liability of $10,000,000 per occurrence with a $10,000,000 completed-operations aggregate, $10,000,000 auto liability, broad form property at 1.1 times the contract price, boiler and machinery cover for the work, all risks contractors' equipment, $5,000,000 pollution liability and drone liability if drones are used. Owners often amend it, so the contract controls.
When does builder's risk insurance end?: It usually ends at completion, acceptance by the owner, occupancy or the policy expiry date, whichever comes first. Some wordings end coverage when any part of the project is used for a purpose other than construction. Arrange the permanent property policy before tenants or buyers move in, and extend the builder's risk term if the schedule slips.
Do I need a licence to build a new home in Ontario?: Usually, yes. The Home Construction Regulatory Authority says builders and sellers of new homes must be licensed, and a builder of contract or custom homes on the owner's land must be licensed as both vendor and builder. A person building a home for their own use may not need a licence if they do not sell it. Renovations of existing homes typically do not require one.
Are bonds required on construction projects in Ontario?: On public contracts of $500,000 or more, Ontario's Construction Act requires the contractor to furnish a performance bond and a labour and material payment bond, each for at least 50% of the contract price. Private owners can require bonds in their contracts at any size. A bond guarantees performance to the owner and is backed by the contractor's own indemnity to the surety.
Does an owner need a WSIB clearance from its contractor?: In Ontario, a principal that directly retains a contractor for construction work must obtain a WSIB clearance certificate, and an owner or developer hiring a builder is a principal. Without a clearance, the principal may be liable for the contractor's unpaid premiums. A householder hiring a contractor only for exempt home renovation work is outside this policy.
How is construction project insurance priced?: Builder's risk is priced on the completed project value, construction type, duration, location, site security and fire prevention, with wood frame rated higher than non-combustible buildings. Deductibles and extensions such as soft costs, delay and flood change the price. Wrap-up liability is rated on construction value, trade mix and the completed-operations period. The builder's experience and claims record matter to both.

Sources

CCDC 41, CCDC Insurance Requirements (publication date December 14, 2020). Canadian Construction Documents Committee, as published by the Roofing Contractors Association of BC, December 14, 2020.
CCDC documents (list of contract forms and editions). Canadian Construction Documents Committee, Accessed October 27, 2026.
Construction Act, R.S.O. 1990, c. C.30 (ss. 1, 6.4, 6.5, 22, 31, 85.1). Government of Ontario, e-Laws, Current consolidation, accessed October 26, 2026.
Operational Policy Manual 14-02-19, Clearance Certificate in Construction. Workplace Safety and Insurance Board (WSIB), January 2, 2020.
Do I need a licence?. Home Construction Regulatory Authority (HCRA), Accessed October 27, 2026.
Building construction price indexes, second quarter 2026. Statistics Canada, The Daily, July 24, 2026.
Canada commercial insurance rates fall for third straight year (Marsh Global Insurance Market Index, Q3 2026). Insurance Business Canada, October 21, 2026.

This page is general information, not insurance or legal advice. Coverage depends on your policy wording and the insurer. Speak with a licensed broker about your situation.

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