Loose-fill thermal composite insulation produced from surface-modified wood scobs has been explored as a potential fire-resistant material for building envelopes. This work involves fire resistance behavior comparisons between four coating systems consisting of liquid glass, liquid glass-tung oil, liquid glass-expandable graphite, and liquid glass-tung oil-expandable graphite. The techniques of thermogravimetric and differential thermogravimetric analyses, gross heat combustion via a calorimetric bomb, cone calorimetry, SEM imaging of char residues, and energy dispersive spectrometry for elemental analysis, as well as propensity to undergo continuous smoldering, were implemented. The coating technique resulted in greater thermal stability at a higher temperature range (500–650 °C) of the resulting loose-fill thermal composite insulation, reduced flame-damaged area heights after the exposure of samples at 45° for 15 s and 30 s, with a maximum of 49% decreased gross heat combustion, reduced heat release and total smoke release rates, improved char residue layer formation during combustion and changed smoldering behavior due to the formation of homogeneous and dense carbon layers. The results showed that the highest positive impact was obtained using the liquid glass and liquid glass-expandable graphite system because of the ability of the liquid glass to cover the wood scob particle surface and form a stable and strong expanding carbon layer.