Renovation Insurance Guide: What Coverage Do You Need in BC?
Before any contractor starts work on your BC home, verify they carry CGL insurance, WCB coverage, and understand what your homeowner policy does (and doesn't) cover during a renovation. This guide explains every policy you need.
Why Renovation Insurance Matters in BC
Every year, BC homeowners face unexpected financial losses from renovations gone wrong — not because the contractor was necessarily negligent, but because the right insurance coverage wasn't in place. A worker injured on your property, a fire that spreads from the renovation zone, or a burst pipe caused by plumbing work can each generate six-figure liability if you're not properly covered.
Understanding renovation insurance in BC isn't complex, but it requires checking the right things before you sign a contract. This guide explains the four main policies that matter and exactly what to verify for each one.
Policy 1: Commercial General Liability (CGL) Insurance
What It Covers
CGL insurance — sometimes called contractor's liability insurance — protects against third-party claims for bodily injury or property damage caused by the contractor's work. If a worker drops a tool through your neighbour's skylight, if a pipe ruptures and floods the unit below, or if a structural error causes part of your home to be uninhabitable, CGL insurance is the policy that pays.
CGL also covers completed operations — meaning it can respond to claims that arise after the renovation is finished if the damage is traced to the contractor's work.
What to Verify
- Minimum coverage: $2 million per occurrence for residential renovations. Projects over $300,000 should have $5 million or more.
- Certificate of Insurance (COI): Request a COI naming you as an additional insured on the policy. This isn't just a certificate — it means the insurer will notify you if the policy lapses.
- Policy expiry date: Confirm the policy covers the full duration of your project, not just the start date.
- Exclusions: Some cheaper policies exclude specific types of work (mould remediation, asbestos, structural changes). If your renovation involves any of these, confirm they're covered.
Red Flags
A contractor who hesitates to provide a COI, offers a policy with less than $1 million coverage, or whose certificate shows a home inspector or handyman policy (not a contractor's commercial policy) is a red flag. Legitimate renovation contractors in Metro Vancouver carry standard CGL policies costing $2,000–$8,000 per year — it's a basic cost of doing business.
Policy 2: WorkSafeBC (WCB) Coverage
What It Covers and Why It Affects You
WorkSafeBC (the BC equivalent of WCB) covers workers injured on the job with medical expenses, rehabilitation, and wage replacement. This sounds like the contractor's problem — but as a homeowner, it directly affects you.
Under BC's Workers Compensation Act, if an injured worker isn't covered by WorkSafeBC, the homeowner can be classified as a "principal" and held personally liable for compensation costs. This means that if an unregistered contractor's worker breaks an ankle on your property, you may owe tens of thousands of dollars in medical bills and lost wages — out of your own pocket.
How to Verify WCB Clearance
Don't accept a verbal assurance. Request a WorkSafeBC clearance letter — a document the contractor obtains directly from WorkSafeBC confirming they are registered and in good standing. You can also verify online at worksafebc.com using the contractor's account number.
The clearance letter should be dated within 30 days of the project start. For longer projects, request updated clearance letters monthly — registration can lapse if premiums aren't paid.
Sole Proprietors and Subcontractors
Be aware: sole proprietors in BC can opt out of personal WorkSafeBC coverage. If your contractor operates as a sole proprietor and opts out, they are personally uninsured — and you may still bear liability for injuries. Ask specifically: "Are you personally covered by WorkSafeBC, and are all your subcontractors registered?" Get the answers in writing.
Policy 3: Builder's Risk Insurance
What It Covers
Builder's risk insurance (also called course of construction insurance) protects the renovation work itself during construction — materials on site, work in progress, and the structure being renovated. It covers losses from fire, theft, vandalism, and certain weather events.
Without builder's risk coverage, if a fire breaks out while your kitchen renovation is half-complete, you may be left with a partially demolished home and no coverage for the materials already installed or the construction materials waiting on site.
Who Pays for Builder's Risk?
For larger projects (typically $100,000+), your contractor may carry a blanket builder's risk policy that covers all their active projects. For smaller projects, you as the homeowner are usually responsible for obtaining a builder's risk endorsement on your existing home insurance policy.
The cost is typically 1–2% of the renovation value per year. For a $50,000 bathroom renovation, expect $500–$1,000 for builder's risk coverage during the construction period.
When You Need It
- Structural renovations where exterior walls are opened
- Projects where materials are stored on-site for extended periods
- Renovations exceeding $50,000 in value
- Projects where the home will be vacant during construction
Policy 4: Your Homeowner's Insurance During a Renovation
The Notification Requirement
This is the most commonly overlooked insurance issue in BC home renovations. You must notify your homeowner's insurer before starting any significant renovation. Failure to do so can void your coverage for renovation-related claims — and sometimes void the entire policy.
Most BC insurers define "significant renovation" as any work involving structural changes, electrical upgrades, plumbing modifications, or projects exceeding $10,000–$25,000. When in doubt, call your broker before work begins.
What Changes During a Renovation
Once you notify your insurer of an active renovation, several things may happen:
- Vacancy clause: If the home will be unoccupied for more than 30 consecutive days during renovation, your policy's vacancy clause may limit or void coverage. You'll need a vacancy permit or construction insurance to fill the gap.
- Liability gap: Some home policies exclude liability for construction activities. Your contractor's CGL should cover this, but confirm there's no gap.
- Coverage limit increase: After a major renovation, your home's replacement value increases significantly. Update your coverage limits after completion — otherwise you'll be underinsured in a total loss claim.
Post-Renovation Policy Update
Once your renovation is complete, schedule a call with your home insurance broker to review and update your policy. A $150,000 kitchen and bathroom renovation can increase your home's replacement value by $200,000 or more. Failing to update your coverage means your policy won't pay full replacement in a catastrophic loss.
Insurance Checklist Before Signing a Renovation Contract
| Item | What to Request | Minimum Standard |
|---|---|---|
| CGL Insurance | Certificate of Insurance naming you as additional insured | $2M per occurrence |
| WorkSafeBC | Clearance letter dated within 30 days | Registered & in good standing |
| Builder's Risk | Confirm who carries it — contractor or homeowner | Full project value |
| Your Home Insurance | Notify your broker before work begins | Vacancy clause reviewed |
| Subcontractors | Confirm all subs are covered by contractor's policy | Same standards as primary contractor |
Red Flags: Signs a Contractor May Be Uninsured or Unregistered
- Reluctance or delay in providing a Certificate of Insurance
- Policy certificate that expired or shows a personal (not commercial) policy
- Inability to produce a WorkSafeBC account number or clearance letter
- Quote that's 30–40% lower than all other bids with no clear explanation
- Requests for all payment in cash
- No business registration or license number (required for all renovation contractors in BC)
The BC Consumer Protection Act requires renovation contractors to be registered with Consumer Protection BC for contracts over $1,000. You can verify a contractor's registration at consumerprotectionbc.ca. Unregistered contractors offer you no protection under BC's home renovation dispute resolution process.
What Reno Stars Carries
We carry full Commercial General Liability insurance at $5 million per occurrence, maintain current WorkSafeBC registration for all workers and subcontractors, and provide Certificates of Insurance to every client before project start. We're registered with Consumer Protection BC and happy to provide documentation of all coverage upon request.
Before you sign any renovation contract, check the contractor's insurance standing. It's one of the most important steps in choosing a renovation contractor in Vancouver — and it takes five minutes to verify.
Ready to start your renovation with a fully insured team? Get a free estimate from Reno Stars — we'll bring our insurance documentation to the first meeting. Planning your budget? Our kitchen renovation cost guide and bathroom renovation cost guide have real Vancouver pricing data to help you plan.