Tariffs stretch rebuild times, but clients aren't extending indemnity and BI coverages

Woman with tech on a construction site — iStock.com/mihailomilovanovic

Sweeping tariffs imposed by the U.S. government in early 2025, and quickly countered by Canada and its other trade partners, triggered rapid price inflation for labour as well as construction and rebuild materials in Canada. Consequently, supply chain delays and other tariff-related factors are stretching restoration timelines.

And yet, most policyholders aren’t rushing to extend indemnity periods or change their business interruption (BI) coverage, said experts last week at the RIMS Canada Conference in Calgary.

Policyholders are “generally buying what they bought last year,” says Amy Barnes, head of energy, power, and climate sustainability strategy at Marsh.

“We are in a really, really tough market,” she said during a panel discussing global disruption in insurance programs.

Most insurance buyers are renewing the same insurance program they had the year before, with minimal change, because the market is too tough, and organizational budgets are too tight for expansion or experimentation, she explained.

“The appetite, in the past, when we’ve had soft markets, people have used some of the premium savings to enhance their coverage, and we would often give that advice, because…even though [risk managers] have got a very large spend, [they] often have very little discretion over that spend,” she said. “And the pressures on organizations are such that those savings are captured, as opposed to typically being redeployed to invest in broader coverage.”

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Since it’s a tough market, companies aren’t showing much appetite for budgeting extra funds to enhance insurance coverage. So instead of adjusting limits or extending the indemnity period to match today’s longer rebuild times, many organizations are just renewing the same BI program structure they had before, including same limits and restoration period, say P&C commercial insurance experts.

“People take the savings because it’s a really difficult economy,” Barnes said.

Panellists emphasized the new normal for restoration timelines and rebuild periods include:

Long lead times for materials

Delays in sourcing alternatives

Increased regulatory and customs delays

Renewal strategies and policy considerations

Panellists provided a list of strategies and best practices for risk managers and brokers ahead of insurance renewals.

Collaborate early with underwriters on supply chain exposure

Adjust BI worksheets to reflect new cost structures

Review contingent business interruption, ingress/egress, and delay-in-startup coverages

Negotiate specific language addressing tariff disruptions

Build custom endorsements when needed.

Risk managers should consider a number of commercial insurance policy recommendations, should the opportunity arise.

The first is to extend the indemnity period where possible.

“I front-ran that piece [when I] knew the market was softening,” said Cyndi Ruff, insurance manager at Gibson Energy Inc. “And I said, ‘I appreciate that we can grab some savings, but I would like to put it back to the [insurance] program.’ And [the organization] agreed with me.

“We added six months to our indemnity period. I’m one of those people who will have an 18- to 24-month indemnity period, just between the regulatory compliance to rebuild what I have and where I have it, and then how long it will take me to get the equipment, how long it will take me to get the steel.”

Other policy considerations outlined by panellists include: