When you build a new home or a multiplex in Vancouver, the old house comes down, the lot sits open for a while, and then a new building goes up with trades, deliveries and neighbours all around it. Each stage changes what can go wrong, and each one needs the right insurance. In this post we walk you through what happens to your existing home policy, what builder's risk insurance covers, the builder's liability policy, wrap-up policies, who buys which policy under each contract type, and what a lender asks for. We finish with practical tips and one first step.
This is general information. Insurance policies differ in their wording, so the person to set up your cover is a licensed insurance broker who reads your contract and your loan papers. We point you to how to check a broker's licence below.
Four Kinds of Insurance Around a Build
Most families meet four kinds of insurance on a Vancouver build. They cover different things, and different people buy them.
- Your Existing Home Policy. It covers the house you live in today. It changes once you move out, and it ends when the house is demolished.
- Builder's Risk, or Course of Construction, Insurance. It covers the new building and the materials while the work goes on.
- The Builder's Commercial General Liability Policy. It covers claims from other people, such as a neighbour or a visitor.
- Home Warranty Insurance. It covers defects in the finished home for set periods after completion. We explain it in a separate post, linked below.
On large projects there is sometimes a fifth: a wrap-up liability policy that covers everyone on site at once.
Your Home Insurance Before and During Demolition
Many Vancouver families build on the lot they already own. The first insurance question is about the house you are about to leave.
The Insurance Bureau of Canada (IBC), the national group for home, car and business insurers, tells homeowners on its home insurance buying page to contact their insurance representative before they renovate or make upgrades. For a rebuild, the change is larger: the people move out, then the house comes down.
BC law puts the duty to report on you. Statutory Condition 4 in section 29 of BC's Insurance Act says the insured must promptly give written notice to the insurer or its agent of a change that is material to the risk and within the insured's control and knowledge. If the insurer is not told promptly, the contract is void for the part affected by the change. If the insurer is told, it may end the contract or ask for an extra premium, which you then have 15 days to pay.
Vacant or Unoccupied: Two Words Insurers Use
Insurers use two words with different meanings. The IBC glossary calls a building "unoccupied" when the contents are still there but the people are away for a while, for example on vacation. It calls a building "vacant" when all occupants have moved out with no intention to return, or no new occupant has moved in. In a vacant building, the contents are gone and only the building is left.
That difference matters to a Vancouver family who moves into a rental while the old house waits for its demolition date. A real BC case shows how. In Coburn v. Family Insurance Solutions, 2014 BCCA 73, the owners began renovating a house in January 2011 after their long-term tenant moved out. One owner worked on the house on most days, but nobody lived there. On March 23, 2011, a fire caused significant damage. The insurer refused the claim because the house had been vacant for more than 30 days, and the BC Court of Appeal dismissed the owners' appeal.
The policy in that case also excluded loss while the house was "in the Course of Construction". That was one insurer's wording from 2011, and your policy will have its own. Read your exclusions with your broker before the moving truck comes.
What To Tell Your Insurer
Give your insurer or broker the dates in writing: when you move out, when the house will be empty, when the demolition is booked and when the new construction starts. Ask what your policy covers on each of those dates, and what new policy takes over once the house is gone. Keep their answer in writing with your project papers.
Builder's Risk Insurance: The New Building While It Goes Up
Once the old house is gone, there is a new thing to insure: the building under construction, plus the lumber, windows and equipment on site.
The IBC glossary describes builder's risk insurance as "insurance coverage on property under construction, including loss to buildings, machinery, and equipment under the course of construction, and materials and supplies incidental to the completion of the construction project." You will see the same kind of policy called course of construction insurance, because it covers the building during the course of construction.
The value at risk grows every week. On the first day, the site holds a foundation crew and some forms. By the last month, it holds a finished building with cabinets, appliances and fixtures inside. That is why a lender can ask for cover based on the finished value, which we explain below.
What the National Contract Forms Ask For
Canada has standard construction contracts from the Canadian Construction Documents Committee (CCDC), a national committee of industry groups. Their insurance list is a separate free document, CCDC 41, published December 14, 2020. For property insurance on the work, CCDC 41 sets a limit of no less than 1.1 times the contract price plus the full value of any products and design services the owner supplies, with a deductible of no more than $10,000.
For a family home, BC Housing's hiring guide points homeowners to the sample contracts sold by the Canadian Home Builders' Association of British Columbia. CCDC 41 is still a useful checklist: it shows the questions a careful contract answers about the amount, the deductible and the materials you buy yourself.
The Builder's Commercial General Liability Policy
Builder's risk covers the building. Liability insurance covers harm to other people and their property.
BC Housing's Hiring a Builder in BC guide (February 2025, page 12) lists this as question 6 to ask every builder: "Do you have a commercial general liability insurance policy? What is the limit of the policy?" The guide explains that the policy protects the builder against claims from third parties during construction, for example if the builder damaged a neighbour's property or a visitor was injured on the site.
On a Vancouver lot, neighbours are close. A narrow side yard, a shared fence, a lane with parked cars, an excavation next to the neighbour's foundation: each one is a place where damage to someone else's property can happen. For a sense of scale on large projects, CCDC 41 asks for general liability limits of no less than $10,000,000 per occurrence. Your contract sets the figure for your project, so ask your broker what limit fits a build your size.
Ask for proof in the form of a certificate from the builder's insurance broker. Check four things on it: the company name matches the company on your contract, the limit, the policy dates, and whether you are added as an insured party. A policy has an end date, and a multiplex build can run past it, so ask for the new certificate when that date comes.
The same BC Housing page also tells owners to ask for a WorkSafeBC clearance letter, which confirms that the builder is registered with WorkSafeBC and up to date with its payments. Our guide on choosing a builder covers that check.
Wrap-Up Liability Insurance
On a large project, each company can carry its own liability policy, or one wrap-up policy can cover them all. The IBC glossary describes it as "one liability policy insuring the legal liability of all the involved interests (owner, contractor, subcontractor, architects, engineers, and other participants) of a large construction project."
The IBC's own words say "a large construction project." Whether a wrap-up suits a Vancouver duplex or sixplex is a question for a licensed broker who sees your project. If you do use one, the contract should say who buys it, who pays the premium and who pays the deductible.
Who Buys Which Policy Under Each Contract Type
Our guide to fixed price, cost plus and construction management contracts explains how each type pays the builder and who carries the cost risk. Insurance follows the same logic: the contract should say who buys each policy and who pays for it.
- Fixed Price. The builder gives one price for the work in the contract. Ask whether builder's risk and liability insurance are included in that price, and ask to see the certificates before work starts. CCDC 41 gives one model: the deductible on the liability and property cover can rise only if the owner agrees, after the contractor proves it can pay.
- Cost Plus. You pay the actual cost of the work plus the builder's fee. BC Housing's guide says a cost plus contract should clearly define what counts as a cost. Ask whether insurance premiums count as a cost you pay, and whether the builder's fee is charged on top of them.
- Construction Manager. BC Housing's guide describes an owner who hires a builder as a construction manager to oversee all the trades directly, and says owners should understand the responsibilities and risks of this type of contract. When you hold the trade contracts yourself, ask your broker who should buy the property policy on the building and what each trade must carry.
If you are thinking about building without a licensed builder, our post on owner builder or licensed builder in BC explains the duties you take on. On a self build, the lender rules below expect the borrower to buy the property policy.
What Your Lender Asks For
A construction loan pays out in stages, and the lender wants the building insured at every stage, because the building is its security.
One lender's written rules show what this looks like. RBC's Builders/Construction Mortgage Additional Instructions (Form 4176, dated September 14, 2024, for all provinces except Quebec and New Brunswick) tell the lawyer to obtain evidence of insurance against damage to the property while it is under construction. The form accepts a builder's risk policy bought by the builder, or a course of construction policy bought by the borrower on a self build. It says the amount of insurance should cover the full appraised completion value of the project.
Your lender's rules may differ. Ask your lender for its insurance list in writing before you sign the loan, and give that list to your broker and your builder. Our guide to paying for a multiplex in Vancouver explains how construction loans pay out.
How Home Warranty Insurance Is Different
Home warranty insurance is a separate policy with a separate job. Section 22 of the Homeowner Protection Act says a person must not build a new home unless it is registered for home warranty insurance with a warranty provider. That policy covers defects in the finished home for set periods. Builder's risk covers damage while the building is under construction.
We explain the warranty tiers, limits and start dates in our BC home warranty guide, so we will not repeat them here.
Practical Tips for Insurance on Your Build
Call Your Broker Before You Move Out. Tell them the move-out, demolition and construction start dates in writing, and ask what covers the lot on each date.
Check the Broker's Licence. The Insurance Council of British Columbia's Licensee Directory shows whether a person or company is currently licensed, the licence class, and the agencies they can represent. The IBC notes that brokers work with several insurance companies, while agents represent one.
Put Insurance in the Contract. For each policy, write down who buys it, who is named on it, the amount, the deductible and who pays it.
Ask for Certificates and Note the End Dates. Collect the builder's liability and property certificates before work starts, and ask for new ones when they renew.
Tell Your Insurer About Owner-Supplied Items. If you buy your own appliances or tile, ask whether they are covered while they sit on site. CCDC 41 adds the value of owner-supplied products to its property limit for this reason.
Send Your Lender's List to Everyone. Your broker and your builder should both see the lender's insurance conditions before the first draw.
How Our Team Works Through It
By Costar's own account on our process page, we agree on a cost plus arrangement with each client for transparency and sign a written contract before construction starts. A Costar construction manager coordinates the subcontractors, orders materials and checks completed work against the plans. Projects in our gallery include the Renfrew-Collingwood 2 Family Dwelling, a duplex at 4942 Moss Street, and We Killarney Townhomes, both in Vancouver.
Insurance is one of the facts to confirm in writing before you sign, with us or with any builder. Ask your Costar consultant which policies are in place for your project, who holds each one and what the certificates show, then have your own broker review them against your lender's list.
If you do one thing this week, call your home insurance broker, tell them you plan to rebuild, and ask what happens to your policy on the day you move out. Then bring those answers to us. Tell us about your project today.
Related on this site: Custom home construction in Vancouver · Multiplex construction in Vancouver · Book a one-hour project consultation
