The expansion of major infrastructure across Ontario is transforming not only skylines, but the way small and mid-sized construction firms must manage risk - and insurance is feeling the pressure.
“With so many concurrent high-rise mixed-use infrastructure projects, we're seeing those challenges around capacity, coordination and liability specifically for contractors,” said Anita Stewart (pictured), director of operations at iKoniK Insurance.
She pointed to tight timelines and overlapping trades as core risks: “One subcontractor's oversight can create a ripple effect that will impact somebody else. And, as a result, the entire project gets impacted.”
That interdependency is increasing demand for wrap-up liability policies and stricter risk transfer agreements between project owners, general contractors, and subcontractors. “We're also seeing pressure on builders’ risk capacities,” Stewart said, with underwriters now requiring more documentation up front - including hot work protocols and water damage mitigation plans - before they’ll even quote.
As development intensifies in areas like the GTA, even small contractors are finding themselves under greater scrutiny from insurers. But for some, municipal red tape might actually offer a layer of protection.
“One of the great things about being in Ontario… is that there is a lot of city involvement,” Stewart said. “You have to go through permits. You have to go through all these different things as a part of your building process… before you even put a shovel in the ground.”
She referenced Brampton as an example, where municipal inspectors enforce the Ontario Building Code. “If the person who is in the near vicinity of me doesn't do their due diligence… you just go into the city and they'll tell you what's happening,” she said. “And you get fined like crazy if you don't follow the rules.”
Contractors, she added, need to do more than carry coverage - they need to stay actively engaged on-site. “I'm going out to the job site… I don't think that they're, you know, I think they're pouring concrete in the ground and it's too wet to pour concrete,” she said. “There are avenues that I can go whereby somebody like my husband [a municipal inspector] would go out and inspect it.”
Ontario’s contractor base is expanding fast, and Stewart warned that many new firms are taking on high-risk jobs without realizing their coverage may no longer be adequate.
“Coverage reviews - historically, you'd only ever review your insurance policy maybe once every few years,” she said. “It's now essential to actually understand your policy limits, your warranties and your subjectivities.”
Some contractors assume that a group, or industry-specific program, will provide blanket coverage for their evolving business. Stewart flagged that this is a risky assumption.
“Many can't absorb the same sort of compliance costs as larger developments can,” she said. “However many of these programs limit you to low-rise buildings… Sometimes the cookie cutter isn’t going to work.”
She stressed that brokers should be proactive in managing coverage shifts with their clients. “You want to make sure that your broker… is actually giving you those touch points,” she said. If a contractor starts doing high-voltage work mid-policy, she said, it may trigger higher premiums or even a carrier switch. “I’ll say, OK, what's the frequency? What's the likelihood? And I'll give them a pitch with two premiums.”
Extreme weather is also reshaping insurance criteria. “Flood, wind, freeze, thaw cycles - it keeps going in a circle,” Stewart said. “We're no longer just assessing the quality of the build, we're looking at site resiliency, drainage systems, temporary protection plans.”
Water damage during construction has become one of the most frequent and costly losses. Underwriters now expect site-level preparedness including water sensors, emergency protocols, and regular inspections. “Builders who demonstrate preparedness are the ones still getting favourable terms,” she said.
That preparedness is often judged by what didn’t happen. “You have a clean record of claims… because you've done all the right things,” she said. “You never needed to actually have a claim.”
Stewart also addressed the rising insurance implications of sustainable construction. While green innovation is seen as a win environmentally, she cautioned that not all risks are fully understood.
“Green energy is better for the environment… but the long-term impact on risk is still being evaluated,” she said. “Just because something is greener doesn’t make it “safer”. You don’t want to be around a burning electric vehicle, for example.”
Emerging risks tied to solar panels, battery storage systems, and performance warranties are challenging underwriters. “I do expect to see broader recognition of green building materials, energy-efficient systems and climate-adapted designs,” she said. “But fire, flood, third-party… those traditional risks aren’t going away.”
Cyber still flying under the radar
Another threat Stewart said is often underestimated in construction is cyber risk. Many small builders dismiss the exposure, assuming it only applies to businesses that handle personal data or financial information. That’s a mistake.
“Until you actually are a victim of a cybercrime, you don't realize how much that can actually impact you,” she said. Stewart recalled a client who fell victim to a phishing email. “We've all gotten those emails - ‘I'm just on my way to a client. Can you go pick me up an iPhone card?’ And it looks so real. That is a cyberattack.”
She warned that in construction, where projects rely on digital coordination and subcontractor networks, cybercrime can cause major disruption - and most SMEs are unprepared.
“It's underrated, under-evaluated coverage that a lot of people just do not consider,” she said.
