Classifying 6 Construction Materials for Builders Risk

Understanding the types of construction materials is a critical risk management skill. Insurance agents, builders, owners or anyone invested in a construction project should have a basic understanding of these categories. Not only do these impact the coverages needed, but they can influence builders risk premium costs. 

The Insurance Service Office (ISO) classifies construction projects based on two factors: building elements and fire-resistance rating. Building elements would include the materials that make up the walls, floor, roof and the structural frame. The fire-resistance rating indicates how long the structure can hold up during a fire resistance test.

In this article, we’ll look at the different types of building elements. We will also discuss Zurich's guidelines and tips for securing the most accurate construction insurance for your project.

Why Understanding Construction Classes Matter

1. Determining Risk: The building elements and fire-resistance rating — which are used to classify construction types — can also help identify potential losses. For example, frame construction poses a higher fire risk due to its flammability. Understanding common perils such as fire, earthquakes or windstorms can come in handy when securing a builders risk insurance policy or other construction coverage.
2. Valuation of Materials: In the event of a disaster, material costs can fluctuate due to inflation and availability. New construction materials are typically valued without depreciation, while the existing structure materials are depreciated, reducing their assessed value.
3. Actual Cash Value vs. Replacement Cost: These are two methods for valuing damaged property. Actual Cash Value is the cost to replace an insured item of property at the time of loss, minus depreciation. Replacement Cost is the current value of materials to be replaced. When computing claim payments after a remodeling disaster, Zurich uses actual cash value for the  existing structure valuation and replacement cost for the new materials used during the renovation.

Identifying the Construction Type

To help ensure the construction project is properly protected, agents should be asking the following questions to help determine the construction type: 

1. What materials will be used for the:
   1. structural frame?
   2. interior and exterior load-bearing walls?
   3. construction floor?
   4. roof?
2. What is the fire rating of materials for each structural item listed above?

Frame (Class 1)

Frame construction* refers to structures built using combustible materials, like wood. Sometimes, builders mix frame materials with non-combustible or slow-burning materials. These can include masonry / brick veneer or metal cladding for exterior walls or other parts of the building. Even so, Zurich classifies the construction type as frame. 

Due to its lower cost and ease of assembly, frame construction is often the most popular choice for homes and small commercial buildings. On the other hand, wood has no fire-resistance rating and can come with additional risks once it's on the job site.

For a single structure, the Zurich Builders Risk Plan considers projects valued up to $25 million “all in”. This means that the total insured value (including any additional coverages) can be up to that limit.

For multiple structures, the same “all in” condition applies. However, the limit extends to $35 million (but no more than $15 million per any one structure, unless an exception is made by underwriting).

Mass Timber / Cross-Laminate Timber (CLT) 

Mass timber is a category of wooden products made by gluing, nailing or doweling layers of wood together. Some reasons owners, developers and building professionals use mass timber include:

• Builders can construct panels off-site, which reduces labor costs and construction time.
• Wood is a more sustainable alternative to materials like concrete or steel. 
• Exposed wood panels can add a unique aesthetic appeal and design flexibility. 

Cross-laminate timber (CLT) is a category of mass timber. Each layer of wood is placed perpendicular to the others, providing strength in both directions. CLT is an alternative to concrete to form the walls, roofs, floors and ceilings of a building.

Mass timber or cross-laminate timber has different structural properties than regular frame construction. CLT panels are highly rigid and strong, making them suitable for larger spans and taller buildings. Timber framing relies on the size and quality of individual posts and beams. This limits its use in larger structures.

Heavy timber or cross-laminate timber construction does have some fire resistance in the material. Zurich treats these construction projects as frame unless the roof, ceiling, walls and floors are done with this fire-resistant material. But, if the entire roof, ceiling, walls and floors are comprised of this material, Zurich may offer lower pricing to reflect the one-to-two-hour fire rating.

Joisted Masonry (Class 2) 

Joined masonry refers to buildings that have exterior walls of masonry material (adobe, brick, concrete, gypsum block, wood iron cladding, hollow concrete block, stone, tile, etc.) combined with wood frames, roofs and floors. Some examples of accounts secured with these materials are single-family homes, offices, or warehouses.

Other examples that fit into this category are load bearing walls that utilize concrete block, masonry or reinforced masonry.

Builders may choose joisted masonry materials because they are less likely to catch fire and offer more structural stability. According to the ISO, their fire-resistance rating is “not less than one hour.”

Non-Combustible (Class 3) 

Non-combustible construction materials are either slow-burning or do not ignite, burn, or fuel a fire. The most common non-combustible material is steel. Builders can combine it with masonry fill (such as perlite or vermiculite), brick veneer, and metal sheathing. It can also include an exterior insulation finishing system.

A multi-story, non-combustible building would typically have concrete floors on a steel frame with a steel deck. Think of warehouses and manufacturing facilities.

Like frame construction, non-combustible materials are popular as they’re easy to assemble and economical.

The composition of the non-combustible materials (e.g. light metal, heavy metal, heavy steel, etc.) is an important detail to include on the builders risk application. Perils such as wind or hail can have a major impact on light metal versus heavy metal or steel. Agents can include this information in the comments box on the application to avoid a prolonged underwriting process. 

Masonry Non-Combustible (Class 4) 

Similar to joisted masonry, masonry non-combustible construction requires builders to use masonry materials for exterior walls. Materials may include concrete block, reinforced masonry or tilt-up concrete combined with heavy steel framing. These walls must be at least four inches thick.

However, the floors and roof would use metal or other non-combustible materials—rather than the wood frame you might find with joisted masonry.

Common examples are commercial structures like shopping centers, office buildings, strip malls and schools. Projects in this class have a fire-resistance rating of at least one hour, and up to two.  

Modified or Semi-Fire Resistive (Class 5) 

Modified or semi-fire-resistive buildings have exterior walls, floors, and roofs composed of masonry or stonework. These materials must be at least four inches thick. Some examples of this construction include protected steel, concrete, or heavy masonry as examples.

Exterior walls that are not load-bearing can use slow-burning or combustible materials. These can include brick, stone, terra-cotta or even frame.

Modified or semi-fire resistive materials are strong and enable taller and larger structures. Builders often use them for large-scale commercial structures, like high (10+ stories) and mid-rise (5-9 stories) buildings. The fire resistance rating is normally one to two hours, depending on the other materials included in the structure.

Zurich’s program classifies masonry non-combustible and semi-fire resistive materials the same.

Fire Resistive (Class 6)