Corey Arndt (pictured), president of Lyon & Butler Insurance Brokers Ltd. (a Navacord broker partner), doesn’t shy away from the complexities that define Canada’s construction insurance market today. With rising insurance costs driven by multiple factors—underwriting shifts, capacity reductions, and environmental risks—brokers like Arndt have had to adapt fast.
“It’s multifaceted,” Arndt said. “While we do work on the personal line side for homes, we’re on the commercial side. We have rich legacy as a leading specialist in surety and bonding, and we’re the conduit between customers and carriers. It’s about understanding their needs and projects, and then pairing them with the right company.”
In a market where insurers are shrinking their capacity - partly due to growing environmental risks like climate change - Arndt stressed the importance of maintaining strong relationships with both clients and insurers. This, he said, allows his firm to navigate the stormy waters of rate volatility and fluctuating coverage options.
“With great relationships with our customers - we also have great relationships with our carriers,” he said. “We’ll work with the customers and review the entire project at hand. We’ll get the tender package, review everything beyond insurance needs, and present our expert view of the best-in-market coverage and pricing so they’re properly covered and competitively priced.”
This careful approach becomes even more crucial as construction projects are hit with rising costs—not just from insurance premiums, but from increasing material prices, labor shortages, and tighter regulations. COVID-19, for example, disrupted supply chains and raised the price of raw materials, exacerbating the strain on insurance costs.
“There are so many different factors that can contribute to pricing and coverage considerations,” Arndt added, highlighting that the situation is compounded by natural disasters and other losses insurers have had to cover recently.
Extreme weather events are a growing concern in the industry, particularly when it comes to insuring construction projects in flood-prone or wildfire-affected areas.
“We also monitor the company’s responses when it comes to these issues,” Arndt said, emphasizing the role of his firm in helping clients find insurers capable of handling these risks without spiking premiums excessively. “We’re the conduit, to the customers as well. But it’s also from our side, what we do - keeping up that communication channel with the customers on current market conditions.”
Floods, in particular, have become an increasingly pressing issue, as Canada has faced unprecedented flash floods in recent years.
“A month’s worth of rain in one day… it was devastating to some clients,” Arndt said. “The conversation then quickly turns into discussion about loss prevention and mitigations or what steps are required to get the job site operational? What are the steps that you can take to recover from something like that after it happened?”
In the face of such volatility, Arndt emphasized the importance of comprehensive coverage, especially when dealing with high-risk, large-scale commercial projects.
“We do promote a lot of pollution liability, …not necessarily just having coverage for the one-off job, but having coverage in place at all times,” he said. “You never know what kind of exposures you can face.”
Another significant challenge in today’s insurance market is the reduced capacity of insurers to cover large projects, a shift that has made it difficult for brokers to find the coverage they need at reasonable prices. Despite these difficulties, Arndt pointed out that Lyon & Butler’s centralized marketing model has allowed it to adapt: “Capacity is typically not an issue with us, because our centralized marketers will work with multiple carriers. If capacity is an issue with one company, they will work with multiple, to ensure everything is taken care of.”
As the industry continues to evolve, Arndt acknowledged that maintaining strong broker-carrier relationships is essential for success.
“We work with all the main markets… The point is, working with carriers and keeping on building that relationship, that in itself sounds like a simple statement, but it’s actually quite complex when you’ve got so many people that you’re working with across all of the projects across the year,” he said.
