After years of insurers pulling back from forestry coverage, the forestry market is shifting again. More carriers are re-entering the sector, but stricter government regulations and rising costs are reshaping how policies are written.
“Regulations are continuously changing, and aside from the looming tariff threat, insurance in these sectors—particularly forestry—has always been cyclical,” said Celine Butler (pictured), of PAIB Insurance. “Where many insurers exited forestry in the past six years, we are now seeing renewed appetite for the sector.”
With the Forestry Act and Timber Regulations evolving, long-standing markets are revamping their offerings to close coverage gaps. Insurers are scrutinizing Forestry Management Plans more closely, assessing liability transfers down to subcontractors, and demanding stricter risk management from policyholders.
Insurance is no longer just a financial transaction—it requires more compliance, planning, and understanding of liability.
“These regulations are getting stricter, as they should be,” Butler said. “Policyholders need to carefully review contracts, mitigate risks, and fully understand the liabilities they’re assuming.”
But with increased scrutiny comes rising costs. To manage risk, insurers are offering incentives like GPS tracking, telematics, and fire suppression warranties, which can lower premiums and improve policy acceptance. More experienced insurers are also expanding coverage to include pollution liability, firefighting expenses, rental reimbursement, and loss of use.
“Premiums have gone up significantly,” Butler said. “When a single piece of forestry equipment, like a feller buncher, can cost over a million dollars, it makes sense.”
Yet, a divide is emerging between seasoned insurers and new entrants looking to capitalize on a softening market.
“New players are offering attractive rates, but a closer look reveals major gaps in coverage,” Butler said. “It’s crucial to have an experienced professional review policies to ensure coverage includes critical protections like rental reimbursement, broad-form coverage, and replacement cost valuation.”
For Butler, who works directly in Timmins rather than a major city like Toronto, firsthand industry knowledge makes all the difference.
“Being on the ground allows me to visit clients, see their operations, and understand the risks they face,” she said. “That’s a key part of the underwriting process.”
Forestry isn’t the only industry under pressure. Construction is grappling with rising costs and supply chain disruptions—issues Butler expects to worsen if new tariffs take effect.
“Inflation has already driven rebuilding costs through the roof,” she said. “Policyholders need to purchase higher limits, and that means higher insurance premiums.”
As construction costs surge, insurers are struggling to keep pace. This leads to higher premiums, larger deductibles, and additional costs that businesses must absorb.
“Building values are rising, forcing the increase of coverage limits, pushing some policies beyond insurers’ capacity and increasing reliance on reinsurers,” Butler said.
Despite the challenges, Butler remains confident in the industry’s ability to adapt.
“The top insurers—some with over a century of experience—are evolving to meet these demands,” she said. “While regulations sometimes outpace policy updates, insurers are finding ways to connect with clients and provide better coverage solutions.”
The market is changing, and businesses must adjust. The question now is whether insurers can keep up.
