In an experiment on territorial brown trout (Salmo trutta), we addressed the novel hypothesis that protective cover increases the value of a territory in relation to the perceived level of predation risk. We predicted that territory holders should invest more resources defending territories with cover than territories without cover, and that defence should increase as predation risk increases. First, trout were allowed to establish ownership in territories with or without overhead cover. Second, predation risk was manipulated by simulating aerial predator attacks in half of the territories of each type, whereupon the preference for cover was estimated. Third, owners of the four types of territories were staged in dyadic contests against size-matched intruders. Territory owners showed a preference for cover, which increased further after simulated predator attacks. In subsequent contests, conflicts over territories with cover were settled faster than conflicts over territories without cover, which may suggest that the value of cover increases the motivational asymmetry between owner and intruder. Consistent with our hypothesis, owners of territories with cover were much more aggressive if they had been subjected to predator attacks the day before the conflict. These results suggest that territory owners are able to estimate the value of protective cover in response to variation in the level of predation risk in the habitat.