Economic uncertainty, exacerbated by recent US tariffs, has prompted small and medium-sized businesses (SMBs) in Canada to reassess their business interruption insurance, according to Jonathan Weir (pictured), a partner at KPMG with a focus on the insurance sector.
Weir says that, much like after the COVID-19 pandemic, Canadian businesses are taking a harder look at their business interruption insurance. It used to be something most companies barely glanced at – tucked into a commercial property policy and rarely questioned. Most businesses didn’t pay close attention to the specific triggers or policy wordings, as large-scale business interruptions were considered uncommon.
Now, that’s changed. Businesses are far more tuned in to what’s actually covered, what’s not, and how complicated claims can get – especially after high-profile legal battles over business interruption payouts.
“Compared to five or 10 years ago, even small businesses are [now] more aware of the risk they're carrying and the risk that insurance can help offset or mitigate… I think it's a great time to have those conversations now,” he said.
Alongside this heightened risk awareness, Weir observes that cost sensitivity has become a defining concern for SMBs.
Many small business owners are scrutinizing their insurance spending more closely than ever. With profitability under pressure from inflation, supply chain issues, and the ripple effects of tariffs, business owners are asking tougher questions about the value of their policies.
“They are looking at the coverage and saying: ‘Is it providing value? Do I understand what’s necessary? What’s appropriate for my business?’” he said.
For Weir, these pressures around risk and cost ultimately point to a third – and arguably most crucial – pillar in the conversation: the value of professional insurance advice.
The market has seen a surge of digital-first players offering simplified insurance solutions for small businesses, but their success so far has been mixed and, at times, underwhelming.
“It’s having a mixed sort of a performance … and I personally think that advice is a big component of that,” he said.
These offerings, he explained, often promise affordability, but they may fall short in areas that are harder to quantify – particularly when it comes to expert guidance.
In an uncertain economy, what often sets coverage apart is advice from a real insurance professional – not just an algorithm.
“If you're a small business owner and you are truly trying to understand the impact of your risk, and to figure out what the value of your coverage is and what's appropriate, you need advice from someone who is not only an insurance professional, but is going to take the time to understand the perspective of your business and give you some useful advice on how to structure and set up your insurance coverages,” he said.
Brokers, Weir says, are under growing pressure to deliver sharper advice as SMBs demand more value from their coverage.
However, he points out a key challenge: servicing small businesses often involves relatively modest premiums, which limits the amount of time and resources a broker can dedicate to each client.
This is where brokers must get smarter about how they deliver value. Technology, Weir suggests, has a role to play in helping brokers quickly assess a client’s business, identify exposures, and make coverage recommendations – without turning the process into an unprofitable exercise.
Another emerging solution is specialization. Larger brokerages are developing industry-specific expertise that allows them to serve SMBs more effectively. Whether it's retail, construction, mining, or professional services, brokers with deep knowledge of a particular sector are better positioned to identify coverage needs, spot redundancies, and tailor policies with precision, Weir said.
He points out that programmatic insurance is also gaining traction as a scalable strategy for addressing small business needs. By designing standardized coverage programs for specific business types – such as auto repair shops, franchisees, or other defined segments – brokers can offer finely tuned products that deliver just the right amount of protection.
Weir says that these emerging solutions matter not just because of the state of the economy, but also because no-one really knows when, if, or how the tariff situation will get resolved.
For this reason, he is cautious in framing a definitive economic forecast. The lack of clarity around tariffs has made it more difficult for SMBs to make strategic decisions, from investing in growth to planning long-term operations. For businesses with limited capital, the challenge is even more acute.
Many, he says, are already taking practical steps to reduce their exposure: adjusting supply chains, diversifying target markets, and modifying trade relationships.
However, external factors make it difficult to make even short-term projections.
“We’ve seen that large public traded companies are coming out and saying that they don’t have a revenue forecast to provide because it is too difficult at the moment,” he said.
