Building Construction Insurance
Sutherland Insurance is a fifth-generation independent brokerage in Guelph, Ontario that places building construction insurance across the province. A project programme combines course of construction on the building itself, wrap-up liability covering every party on the site, pollution liability and design-build professional liability. Sutherland Insurance has placed commercial business from Guelph, Ontario since 1870.
Key takeaways
- Building construction insurance is arranged around a project rather than around a company. The insured object is the building under construction, including materials and work in place, from groundbreaking to substantial completion.
- Wrap-up liability covers every party on a single named project under one policy (owner, general contractor and subcontractors) rather than relying on each party's own limits to respond consistently.
- Under Ontario's Construction Act, a contractor on a public contract at or above the prescribed threshold must furnish a performance bond and a labour and material payment bond.
- Sutherland Insurance places commercial business across the markets it holds contracts with.
- Who it is for
- Ontario builders, developers, project owners and general contractors managing residential, commercial or institutional construction
- What is insured
- The project: the structure under construction, its materials and the work in place
- Liability required by law
- No provincial statute requires commercial general liability for most trades
- Workplace coverage required
- Yes, WSIB coverage mandatory in construction since 1 January 2013
- Bond types used in Ontario
- Bid, performance, and labour and material payment bonds
- Policy term
- The project term rather than a twelve-month period, with extensions where the schedule moves
What is building construction insurance?
Building construction insurance is a programme arranged around a construction project rather than around a company. Its core is course of construction coverage on the structure being built, with wrap-up liability extending one set of limits to every party on the site for the duration of that project.
The distinction from a contractor's own annual programme is a distinction of insured object. A contractor's policy insures the contractor: its liability, its equipment, its tools, renewed every twelve months across whatever work it happens to take on. A project policy insures the building: a specific structure at a specific address, from groundbreaking to substantial completion, on a term set by the construction schedule rather than by the calendar.
Both are commonly in force at once, and they answer different questions. When a partly built structure burns down, the loss is to the project and course of construction responds. When a passer-by is injured at the hoarding, the loss is a liability claim and either the wrap-up or the individual contractor's own liability responds, depending on how the project was arranged. Knowing which policy answers which question before the loss is most of the value of arranging them together.
What can an Ontario building construction insurance policy cover?
What a policy can cover
- Course of construction, also written as builders risk, on the structure under construction including materials, work in place and materials in transit or in storage
- Wrap-up liability on a single named project, extending one set of limits to the owner, the general contractor and the subcontractors engaged on it
- Soft costs following an insured loss, covering the additional interest, professional fees and extended schedule a rebuild creates
- Delay in start-up coverage, responding to lost revenue where an insured physical loss pushes completion past the planned date
- Pollution liability for a sudden and accidental environmental release on site, including fuel and hazardous materials handling
- Design-build professional liability for architects, engineers and contractors carrying design responsibility on the project
Commonly excluded under standard Ontario building construction insurance wordings
- The cost of correcting faulty workmanship, materials or design, though resulting damage to other parts of the project is commonly covered
- Damage arising from an existing structure or from work outside the declared project scope
- Injury to workers, which the Workplace Safety and Insurance Board system addresses
- Loss occurring after substantial completion or occupancy, where the project policy ends and a permanent property policy begins
- Gradual pollution and long-term seepage, as distinct from a sudden and accidental release
- Contractual penalties, liquidated damages and warranty obligations assumed beyond an insured contract
Exclusions vary by insurer and by policy form; the issued policy governs.
How much does building construction insurance cost in Ontario?
The factors that move an Ontario building construction insurance premium, in approximate order of influence, and why insurers look at each one.
| Rating factor | Why |
|---|---|
| Total project value and hard construction cost | Course of construction is rated against the completed value of the structure being insured. |
| Construction type and materials used | Wood-frame construction under way is the single largest fire exposure in Ontario builders risk. |
| Project duration and the schedule declared | The policy runs for the project term, and an extension is an extension of exposure. |
| Height, storeys and whether occupied units adjoin the site | Work at height and neighbouring occupied property both raise third-party severity. |
| Hot work and temporary heat used on site | Torch work and temporary heating are the recognized ignition sources on a winter Ontario site. |
| Wrap-up against individual contractor liability | A wrap-up consolidates limits and removes gaps between parties; it is priced on the whole project rather than per firm. |
| Site security, fencing and after-hours monitoring | Theft of materials and vandalism on open sites is a frequency exposure that controls address directly. |
| Claims history and completed-project experience | Loss history is a filed underwriting factor for every commercial insurer. |
What insurance is required on an Ontario construction project?
Workplace safety insurance coverage through the Workplace Safety and Insurance Board has been mandatory in Ontario construction since 1 January 2013. Under Ontario's Construction Act, a contractor on a public contract at or above the prescribed threshold must furnish a performance bond and a labour and material payment bond. No provincial statute requires commercial general liability for most trades.
Beyond those requirements, project coverage is set by the contract and by the parties financing the work. Which policies are arranged, and at which limits, depends on circumstances that vary from one project to the next:
- What the construction lender requires as a condition of advancing funds, and whether it must be named as loss payee.
- What limits the project owner specifies, and which parties must be named as additional insured.
- Whether the project is public or private, which determines whether Construction Act bonding thresholds apply.
- Whether the structure is new construction on open ground or an addition to an existing occupied building.
- Whether the contractor carries design responsibility, which brings professional liability into scope.
- Whether a wrap-up is arranged for the project, or each party relies on its own liability programme.
What situations does building construction insurance commonly address in Ontario?
Project programmes are arranged for a wide range of construction circumstances across Ontario, and the coverage available differs in each. The situations below are common among Sutherland Insurance clients in Guelph and across the province, and each one changes which markets will write the risk.
- A partly framed Guelph residential development damaged by fire before the building envelope is closed.
- A windstorm that damages work in place and stored materials on an open commercial site.
- Theft of copper, lumber or mechanical equipment from a site overnight before installation.
- An excavation that damages an adjoining occupied building's foundation or services.
- A fuel spill on site requiring immediate environmental remediation and reporting.
- A project delayed past its completion date by an insured physical loss, with financing costs continuing.
How Do I Get Business Insurance Through Sutherland Insurance?
Getting insurance through Sutherland Insurance is simple. You can request a quote online or call 519-822-0160 to speak with a licensed broker. We take the time to understand your business, identify your exposures, and find coverage options that fit your needs.
Our Process:
- Request a Quote. Complete an online quote request or call our office to speak with a licensed insurance broker.
- Tell Us About Your Business. Your broker will gather information about your operations, property, revenues, employees, vehicles, contracts, and any other areas that may require coverage.
- Review Your Risks and Coverage Needs. We assess your business exposures and insurance requirements to determine the appropriate coverage limits and options.
- Market Your Account. Sutherland Insurance compares the available commercial markets to help find the best combination of coverage, service, and price.
- Present Your Options. Your broker will review the available quotes and provide recommendations based on your specific needs and goals.
- Bind Coverage and Provide Documentation. Once you select coverage, we arrange the policy and provide any required documentation, including certificates of insurance for clients, landlords, lenders, or other third parties.
What makes Sutherland Insurance different from a direct insurer?
When a claim happens, Sutherland Insurance acts for the client with the insurer, and an in-house claims representative is available on any claim. Sutherland Insurance is an independent brokerage and compares the markets it holds contracts with rather than selling one company’s product. A person answers the phone at Sutherland Insurance, 519-822-0160, Monday to Friday, 8:30 a.m. to 5:00 p.m.
Frequently asked questions
What is course of construction insurance in Ontario?
Course of construction, also written as builders risk, insures a structure while it is being built, together with materials and the work in place. It runs for the project term rather than a calendar year and ends at substantial completion or occupancy, when a permanent property policy takes over. The issued policy sets the trigger.
What is wrap-up liability insurance?
Wrap-up liability covers every party engaged on a single named project under one policy: the owner, the general contractor and the subcontractors. It removes the gaps and limit differences that arise when each firm relies on its own programme. Whether a wrap-up is arranged is a project decision set out in the construction contract.
How is building construction insurance different from contractors insurance?
A contractors programme insures a company across whatever work it takes on in a twelve-month period. A building construction programme insures one project: a specific structure at a specific address, for the term of its schedule. Both are commonly in force at once, and each answers a different question when a loss occurs.
Do I need a surety bond on an Ontario construction project?
Under Ontario's Construction Act, a contractor on a public contract at or above the prescribed threshold must furnish a performance bond and a labour and material payment bond. Private owners and general contractors impose bonding requirements by contract. Whether a bond is required on a given project is set by the tender documents or the contract.
Does construction insurance cover faulty workmanship?
Course of construction wordings exclude the cost of correcting faulty workmanship, materials or design. Resulting damage to other parts of the project is commonly covered, so a badly installed component that later damages finished work is treated differently from the component itself. That distinction is where most Ontario construction coverage disputes sit.
When does a construction project policy end?
A project policy runs to substantial completion or occupancy, whichever the wording specifies, at which point a permanent commercial property policy takes over. Where the schedule moves, an extension is arranged before the original expiry rather than after it. Occupying part of a building before completion can also change the coverage in force.
How many markets does Sutherland Insurance place construction projects across?
Sutherland Insurance places commercial business, including construction projects and surety, across the markets it holds contracts with together with multiple managing general agents and affiliates across Canada. It is an independent brokerage in Guelph licensed by the Registered Insurance Brokers of Ontario.
Get your building construction insurance quote
A licensed Sutherland Insurance broker compares the available markets on every quote request.
Get your building construction insurance quote Call 519-822-0160
A real person answers, Monday to Friday, 8:30 a.m. to 5:00 p.m.