A major Canadian market report released this week carries a warning Ontario business owners should not ignore: you may be insuring the company you were a year ago, not the company you operate today. Tariffs, inflation, and supply chain disruption are changing what your business is worth and what a loss would cost, faster than the usual once-a-year renewal cycle can keep up with.
The warning comes from Lockton Canada's first Canadian market update, published this week. Its message to business leaders was direct: challenge outdated assumptions and make sure insurance and risk strategies reflect the business you run today, not the business you insured a year ago. Here is what that means in practical terms, and what to check before your next renewal.
What changed this year
Trade tensions have escalated sharply. The United States declined on July 1 to extend the Canada-United States-Mexico Agreement for another 16-year term, moving the agreement into annual reviews. In late August, the US imposed 50 percent tariffs on $27.6 billion of Canadian goods, and Canada answered on September 8 with counter-tariffs on the same value of US imports. The report notes that autos, steel, aluminum, and lumber are among the sectors already feeling the impact.
Even if your business is not directly in those sectors, the ripple effects reach further than many owners expect. Replacement costs shift, margins move, and suppliers face pressure of their own. When the underlying numbers change but the policy does not, the coverage picture you bought can quietly become the wrong one.
Where the outdated numbers hurt most
Start with property and inventory. If your inventory now costs more to replace once duties are paid, the insured value on your policy may no longer reflect reality. Being underinsured at the time of a loss can reduce your recovery even when the policy limit itself looks adequate, because many commercial property policies measure you against the true replacement value. An inventory line that was accurate eighteen months ago can be materially wrong today.
Business interruption coverage has a similar problem. This coverage is designed to keep your business whole after a covered loss, and it runs on assumptions about your revenue, expenses, and margins. If tariff pressure has changed the margins on your products, or if inflation has changed what it costs to get back up and running, the indemnity period and the monthly figures in your policy may be built on last year's economics. A business interruption claim settled on stale numbers is a shortfall you discover after the loss, when it is too late to fix.
Cargo and goods-in-transit limits deserve the same look. If each shipment is now carrying a higher dollar value because of duties, a cargo limit set for cheaper shipments may run out mid-claim. Project insurance has the same exposure wherever project costs have moved since the policy was arranged.
Then there is the cross-border liability question. The report specifically advises companies with US operations, customers, or sales to check that their liability limits reflect that exposure. Litigation costs and settlement values in the United States run on a different scale than in Canada, and a liability program built when your US sales were smaller may not fit the exposure you carry now.
Finally, look at who you depend on. The report recommends reviewing supplier and customer concentrations, contracts, and customs compliance, and testing your policy wording against realistic scenarios: a port closure, a transport stoppage, a utility shutdown. These are not remote hypotheticals in a year when supply chains have already been disrupted. The question to ask is simple: if one of those scenarios happened next week, would your coverage respond the way you assume it would?
The good news: the market is on your side right now
Here is the part of the report that works in your favour. Despite the economic backdrop, insurance conditions remain favourable for many Canadian commercial buyers. Aon's latest Canadian market update found pricing flat to down for well-run risks heading into 2027. Capacity and pricing still vary by line, industry, and risk, but many buyers have real leverage at the table right now.
That leverage should be used for more than shaving a few dollars off the premium. A soft market is the time to improve the policy itself: fix wording, address exclusions, correct underinsured values, and bring limits in line with the business you actually run. Those improvements are much harder to negotiate when conditions harden and insurers are tightening capacity.
What to do before your renewal
Do not wait for your renewal date to address this. The report's central point is that these values should be reviewed whenever the business changes materially, not just once a year. If tariffs, costs, or your customer mix have moved meaningfully since your last renewal, that qualifies.
A practical mid-term check looks like this. First, revisit your property and inventory values against what replacement would cost today, duties included. Second, rerun your business interruption figures on current margins and current recovery costs. Third, confirm cargo and transit limits against the actual value of what you are shipping now. Fourth, if you sell into the United States or operate there, confirm your liability limits still fit. Fifth, stress-test your wording against a realistic disruption scenario and confirm the assumptions behind your business interruption cover.
Then bring the results to your broker. Mid-term adjustments are a normal part of a broker's work, and most policies allow changes like limit increases or added endorsements during the policy term. The conversation takes far less time than sorting out an underinsured claim after a loss.
Markets move, tariffs shift, and costs change. Your insurance should move with them. A mid-term review this fall costs you an hour and a broker conversation, and it is the difference between coverage that matches your business and coverage that matched the one you used to have.
Related coverage: business insurance.