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What builders and insurers need to know about mass timber buildings

naturally:wood provides critical insights for insurers and builders regarding mass timber buildings, including risk assessment, fire safety, protection against moisture damage, and more
Addressing insurance challenges in mass timber construction requires collaboration among builders, insurers, and experts. Photo via naturally:wood

Although mass timber construction has been around for some time in both residential and commercial sectors, it's still relatively new to certain segments of the development industry. Despite its proven effectiveness, it has yet to gain widespread adoption.

This knowledge gap may lead to some obstacles, particularly in securing both occupancy and builder's risk insurance for mass timber buildings. For building owners and developers looking to capitalize on mass timber's benefits such as rapid construction, eco-friendliness, comfort, and aesthetic appeal, insurance premiums can be significantly higher—up to five to seven times more compared to conventional steel or concrete structures.

The primary concerns revolve around risk and data availability. Insurance relies on evaluating risk, which traditionally draws from past experiences with steel, concrete, or light wood frame buildings. However, applying this data to mass timber structures poses challenges in assessing risk for a policy for a mass timber building. This impacts the insurer’s decision whether to provide coverage and how much to charge. Despite the dominance of steel and concrete construction, Canada has just over 800 completed mass timber buildings while the U.S. has had just over 2,000, with approximately 200 and 600 respectively erected in the last five years. For more details about North America’s portfolio of mass timber buildings visit the Interactive Map of Mass Timber in Canada and Mapping Mass Timber in the US

Building owners, developers and insurers all have roles to play in building successful long-term relationships as well as properly insuring mass timber buildings. 

Here’s what insurers need to understand and what builders and owners can assist in clarifying.

Distinguishing mass timber construction from dimensional lumber buildings

The Canadian Wood Council notes that while building codes in Canada and the U.S. are evolving to address newer types of construction, builder’s risk insurance rates have not advanced along with construction and codes. 

According to the Insuring Timber Initiative: “Historical risk assessment data has largely focused on light wood frame structure using dimension lumber, such as homes, but there are significant differences that exist for larger buildings that use mass timber as structural elements.” 

Annabelle Hamilton, MSc and technical manager, planning and development, with WoodWorks BC, says, “It’s important to decouple what mass timber means because it doesn’t perform exactly as a light-frame building does. Other factors need to be considered.” Hamilton also notes that while mass timber and light wood frame buildings perform differently, they currently fall into the same insurance classification. 

Proving to be fire safe

Fire is, predictably, a key concern with mass timber construction but there is a substantial and growing body of international evidence of its fire-resistant properties. “There is a misconception that [mass] timber is more vulnerable to fire,” according to the Insuring Timber report. “In fact, numerous tests have been done that prove mass timber can achieve 2+ hour fire resistance ratings and meet or exceed the standards of  building codes.” 

In 2022, for example, the National Research Council of Canada conducted a series of five tests on a mass timber structure in Ottawa, Ont. in front of more than 150 experts from across Canada, including fire officials, building regulators and insurance industry representatives. In the first, a room with exposed mass timber ceiling, beams and columns, and a typical office layout, were set ablaze.

Once the room’s contents were consumed, however, the fire quickly died down and burned out The report notes: “The fire on the burning structural elements largely self-extinguished within the first hour.” And, that was without any water or fire-suppression efforts. 

“It’s important to differentiate the fact that these are much larger, engineered wood members and they’re self-protecting, in a way, through charring that’s limited to the surface,” says Tim Buhler, director, programs and operations, with Canadian Wood Council.

Protecting engineered wood from water

Moisture or water damage is another common concern. This can include both exposure to the elements during construction and problems during occupancy such as burst pipes.

“There’s also a misunderstanding about what mass timber assembly looks like. Nobody talks about the waterproofing membrane, the acoustical topping, the vibration mitigation, the concrete or other materials that are used and sit on top of it. So, if there’s sprinkler activation, the water’s not directly on wood,” Buhler adds, in reference to flooring protection. 

Builders working with mass timber can incorporate mitigations into their designs, including the installation of floor drains as well as misting sprinklers which disperse one-third of the water compared to conventional sprinkler systems, while maintaining equal effectiveness in fire suppression. 

However, limiting exposure to moisture starts in the planning stage and is critical during construction. Using prefabricated mass timber panels and other elements accelerates construction, minimizing exposure time and ensuring timely installation of roof walls for added protection against the elements.

Repairing and replacing damaged mass timber

If a mass timber product does experience damage due to fire or water, what’s next? 

Hamilton acknowledges that there are fewer data points available for repairs of mass timber buildings than there are for concrete and steel or even light wood-framed structures. Buhler notes that, in case of fire, the thin charred layer on a mass timber panel or beam, for instance, can be repaired in place. 

The Insuring Timber report, Debunking Timber Myths, states that: “Options vary depending on the severity of the damage but can be as simple as sanding damaged areas or as complex as replacing large sections.” 

Canadian Wood Council’s publication A Guide for Insuring Timber in Canada notes that repair and rehabilitation of mass timber buildings is a concern for the insurance industry not because of concerns about susceptibility to damage, but because of the unknowns regarding repair costs. “The insurance industry has thousands of historical claims for light wood frame houses and other small buildings, but little data for larger wood and mass timber buildings.” 

Protecting mass timber under construction

The insurance industry also needs information and assurance about mass timber projects while they are under construction, regarding when builder’s risk or course of construction insurance is needed. That’s where builders can take simple, inexpensive and effective steps to ensure safety on site. Buhler notes that the more information you can provide your insurance broker on how the site will be protected from water or fire damage while under construction, the lower the perceived risk and likelihood of an incident occurring. 

Buhler emphasizes the importance of implementing basic fire protections, water-control and -management plans, onsite security, secure hoarding, and regular waste disposal to minimize fire risks during construction. While these measures align with those in steel and concrete construction, mass timber offers distinct advantages, such as quicker assembly, reducing the time materials are onsite and the need for fewer crew members during installation, thus lowering the risk of onsite injuries.

Buhler notes these small investments in site security can pay big dividends in reducing risk of loss and getting insurance companies on board.