Mass timber construction continues to gain ground as a preferred low-carbon building strategy, but insurance and financing barriers remain a critical bottleneck to broader industry adoption. While advances in material science and construction techniques have addressed many technical concerns, the insurance sector has yet to fully align with the realities of modern engineered wood systems.
Insurers are still navigating the learning curve around risk exposure for mid-rise and tall mass timber projects. Without sufficient actuarial data and long-term performance benchmarks, underwriters often rely on conservative models based on light-frame construction. As a result, developers are encountering higher premiums, limited policy options, and prolonged negotiations that delay project timelines.
The Gap Between Performance and Perception
Industry stakeholders know that mass timber structures perform well under fire conditions and exhibit excellent strength-to-weight ratios. Cross-laminated timber (CLT) and glue-laminated beams have been rigorously tested, and new building codes across Canada and the U.S. have begun to reflect these capabilities. However, insurers remain hesitant due to uncertainty around key risks—especially moisture ingress during construction and unknowns around remediation costs if damage occurs.
Water remains the more pressing concern. Unlike fire risk—which is now largely mitigated through compartmentalization and encapsulation—moisture exposure during transport, staging, or early construction phases can cause delamination, fungal growth, or reduced structural capacity. Because many underwriters lack mass timber-specific protocols for water damage, this issue continues to skew insurance terms unfavorably.
Closing the Risk Communication Gap
The mass timber industry is responding by pushing for standardized protocols that insurers can rely on when pricing risk. While every project site has its nuances, clear practices around moisture protection, assembly sequencing, and post-installation monitoring can significantly lower uncertainty.
Professionals across the development chain—from designers to builders to insurers—are increasingly aligned on the need for common frameworks. Structured risk mitigation strategies, supported by real-world data and expert input, are helping bridge the gap between perceived and actual risk.
Three Focus Areas for Improving Insurability
Efforts to make mass timber construction more insurable are generally coalescing around three core strategies:
- Quality assurance programs: Implementing third-party verification across procurement, fabrication, and installation phases helps validate adherence to performance standards. These audits can assure insurers that best practices are consistently applied across job sites.
- Standardized protocols and documentation: Defining repeatable processes for handling, storing, and installing mass timber elements—including protection during adverse weather—makes it easier for underwriters to assess exposure accurately.
- Targeted workforce training: Specialized training programs for trades, project managers, and designers build competency and reduce the likelihood of error. The more experience teams have with mass timber, the lower the perceived risk during underwriting reviews.
These strategies also offer side benefits. Shared protocols improve coordination across teams, reduce liability issues, and drive up project quality. In turn, they create more favorable conditions for securing coverage and attracting lenders willing to invest in long-term mass timber portfolios.
Market Friction vs. Momentum
While the technology behind mass timber is maturing rapidly, the insurance ecosystem has been slower to respond. Many underwriters still operate from assumptions shaped by early mass timber use cases or unrelated light-frame experiences. With fewer large-scale projects in the claims history, actuaries have limited loss data to inform their models.
This friction has economic consequences. Developers must often layer insurance products or accept higher deductibles, which can erode the cost competitiveness of mass timber compared to traditional systems. Lenders may also hesitate without assurance that full coverage will be secured at reasonable rates.
Still, the direction of travel is promising. Markets like British Columbia and Oregon are seeing more multi-storey timber buildings come online. Each project adds to the industry’s knowledge base and expands the case studies available to insurers. Over time, the accumulation of performance data will shift the underwriting perspective from precaution to precedent.
Pathways Toward Risk Maturity
Mass timber construction is reaching an inflection point. For it to scale, insurance must catch up with innovation. This doesn’t mean eliminating caution—it means equipping insurers with clearer signals of quality and repeatability. Industry leadership will depend on building relationships between developers and brokers who understand the unique dynamics of mass timber projects.
With consistent data, shared protocols, and a commitment to training, the sector can evolve from reactive project-by-project underwriting to a more predictable and competitive insurance environment. That transformation is essential if mass timber is to fulfill its role in the future of sustainable, resilient urban development.