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Mass timber construction insurance

Insurance for mass timber construction

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There are multiple pathways to achieving a greener built environment, and mass timber stands as one of the leading solutions due to its inherent ability to reduce embodied carbon emissions across a building’s lifecycle.

Although forms of timber have historically been used in construction, mass timber is a relatively new product being used in innovative ways. Designers are incorporating it into high-rise developments and combining it with other structural materials to push the boundaries of sustainable building.

A challenge is that insurers do not have historical data allowing them to understand clearly the risks associated with mass timber in projects. As a material, mass timber is susceptible to elements — most notably fire and water — so its presence is viewed as potentially increasing the frequency of losses as compared to traditional materials. This leads to a level of uncertainty regarding the time, cost and complexity of repairs following physical loss or damage.

Marsh has supported clients through these challenges, using its experience and insurance industry insights.

Why Marsh?

As insurers tend to view mass timber projects as higher risk, it can impact capacity, as well as premiums, deductibles/excesses, conditions, exclusions, and sublimits. For larger projects, securing desired capacity may be a challenge.

Marsh helps clients provide detailed information on key project risks and promote the use of robust risk management measures.

To help insurers understand the risk profile of a mass timber project, a route to market needs to be considered and planned well in advance of the commencement of works on-site. A structured framework is a strong starting point for our clients looking to place insurance programmes covering their projects.

FAQs

Mass timber is a general term for large, engineered wood products that typically involve the lamination and compression of multiple layers to create solid, singular panels of wood. Different products fall under this definition, such as cross-laminated timber (CLT), glued-laminated timber (glulam), and laminated veneer lumber (LVL).  

Sustainability is a necessity for the construction industry across the world. There is a multitude of means to achieve a greener built environment, of which mass timber is one of the leading solutions due to its inherent ability to reduce embodied carbon emissions across a building’s lifecycle. Although forms of timber have historically been used in the construction industry, mass timber is a relatively new product and is being used in innovative ways, with designers incorporating it into high-rise developments and in combination with other structural materials.

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