Manufacturers don’t operate alone; OEMs and integrators are effectively ‘in the house.’ That’s where third‑party risk shows up. OEMs can derail production with bad or late parts, breakdowns, logistics disruption, recalls and remote-access cyber exposure. Integrators can raise your cyber risk even more because they are often granted higher-level access in order to configure systems.

Jen Warman is a Senior Client Executive with more than 14 years of experience supporting manufacturers and other complex Canadian businesses. In this article, she breaks down OEM and integrator risks that can disrupt manufacturing processes, as well as the practical steps to reduce them.

At the scene

First, make sure everyone is safe.

• Check for injuries and call emergency services if needed.
• Do not move anyone who is injured.
• If possible, move vehicles to a safe location.  
• Turn on hazard lights and move all uninjured passenger to safety.
• Take photos and record what happened.
• Get the contact details for witnesses

Exchange information:

• Name and phone number.
• Insurance and policy number (take a photo of their pink card).

You need to file a police report if:

• There are injuries.
• Missing documentation.
• The vehicles are not drivable.
• Damage exceeds provincial threshold (e.g., Alberta’s is $5,000 in total combined damages).

Even if you feel fine, visit a doctor. Injuries can appear later.

Call your insurer and your Acera Insurance advisor

• Not sure who your insurer or broker is? Check your pink slip.
• Keep all receipts (towing, rentals, emergency repairs).

Your Acera Insurance advisor helps you:
Understand coverage | Advocate for you during the claims process | Protect your coverage long‑term | Identify prevention steps

During your claim

To keep things moving smoothly:

• Make sure your contact information is up to date.
• Follow your claims adjuster’s instructions.
• Keep your Acera advisor looped in. We are here to advocate for you.
• Review any settlement documents carefully before signing.

After the claim

Filing multiple claims can affect your premiums and coverage options.

Repeated claims, especially of the same type, make it difficult to find affordable options. We’ll help you understand how to reduce risk going forward. 

If you have any questions or need to report a claim, contact your Acera Insurance advisor.

Calling after hours? Our emergency claims reporting lines are available 24/7. After Hours Claims: 1.866.212.3239

Information and services provided by Acera Insurance, Acera Benefits and any other tradename and/or subsidiary or affiliate of Acera Insurance Services Ltd. (“Acera”), should not be considered legal, tax, or financial advice. While we strive to provide accurate and up-to-date information, we recommend consulting a qualified financial planner, lawyer, accountant, tax advisor or other professional for advice specific to your situation. Tax, employment, pension, disability and investment laws and regulations vary by jurisdiction and are subject to change. Acera is not responsible for any decisions made based on the information provided.

Catastrophic losses are no longer rare. More than $11 billion in insured losses from severe weather events between 2024 and 2025 show that the real challenge for businesses isn’t just the size of losses – it’s how often these events are hitting, across more regions, with multiple perils at once.

According to Leah Wood, Director, Claims & Loss Control at Acera Insurance, the reality businesses are facing is a pattern of rising frequency and increasing scale of losses that are compounded by overlapping perils.

In this article, Leah shares what the past few years have revealed about claims readiness and recovery, and how businesses can prepare for what comes next.

First catastrophe claims lesson: Speed beats perfection

Ensuring that your vendors are prepared should be a fundamental element of any risk management strategy. When severe weather events strike, there is often a significant strain on available resources, including vendors and adjusters.

Reducing downtime through proactive partnerships

Delays compound loss severity and downtime for businesses. By prioritizing vendor readiness and establishing relationships with reliable service providers ahead of time, commercial clients can significantly improve their outcomes after a catastrophe. Fast action helps mitigate losses and accelerates the recovery process, allowing operations to resume sooner and with less disruption.

“Claims rarely occur during regular business hours. They often happen at inconvenient times – overnight, on weekends, or when you’re not prepared.”
– Leah Wood

Streamlining claims with organized records

Maintaining in-depth and organized records prior to a natural catastrophe is crucial for facilitating a swift restoration and repair process. When a catastrophic event occurs, insurers and adjusters must assess urgency and coverage across numerous claims simultaneously. Businesses that keep up-to-date site photos, detailed logs, invoices and “before” records will be able to navigate the claims process quicker.

Why water damage causes most claims to grow in catastrophe situations

Whether it’s hail, wildfire or flood events, water damage is the biggest issue for catastrophe claims. It’s often the hidden driver of severity with mold risk, damage and downtime.

Wildfire claims: Access restrictions and contamination

Even during wildfires, water can be a significant source of damage due to contaminants entering the water system, compromised pipes, erosion and runoff.  Wildfire can also cause access restrictions which can slow down recovery times.

Flood claims: Coverage wording and downtime risk

Flooding, whether it’s from flash floods or pluvial flooding, can be especially disruptive because of what the water has come into contact with along its path. Drying time and demolition decisions directly affect downtime and flood claims coverage can vary by wording depending on the policy, such as distinctions between overland water and sewer backup.  

Hail claims: High volume, hidden water damage

Even perils with seemingly predictable effects, like hail, often result in hidden water intrusion that extends repair timelines and business interruptions due to the high-volume of claims, repeat damage and water entry. Hail also creates huge repair pressure — Calgary’s 2024 hailstorm generated 130,000+ claims and pushed insured loss estimates to about $3.25 billion, which strained trades amid sourcing the materials needed to repair the damages.  

Steps to take for a fast and successful claim in a catastrophe response

It can be easy to feel overwhelmed at the beginning of the claims process, especially following a large natural catastrophe. To be successful, you need to move quickly.  Claims advisors will focus on the first 48 hours to get clear coverage path early so decisions don’t stall.

Your checklist for the first 72 hours should include:

First 24 hours

• Making sure your site is safe by limiting access and ensuring all power, gas and water are shut off.
• Taking steps to minimize further damage by removing standing water, boarding up doors and covering windows with tarps.
• Documenting all damage before cleanup begins. Take photos and videos, keep all receipts and maintain detailed records and inventory of all damaged property and restorative work being done.
• Contacting your insurer as soon as possible to start the claims process. Keep your records tidy and well-organized so you can easily supply any documentation needed during the repair and restoration process.

Next 48-72 hours

• Confirm the plan with all vendors: restoration, glazing, roofing and temporary power.
• Separate “emergency work” from “permanent repair.”
• Keep a downtime log (what’s closed, what’s partial, what’s reopened).

Even when conditions aren’t ideal, taking early ownership of your business’s catastrophe response before adjusters and vendors arrive can help set you up for success moving forward.

Repair queue management, supply chain disruption and planning for delays

Even with a robust disaster recovery plan, delays are sometimes unavoidable. These setbacks often result from supply chain disruptions, limited availability of tradespeople and adjusters overwhelmed by multiple regions at once.

“We can’t stop the weather, but we can plan for it.”
Leah Wood

Strategies to minimize business interruption

To help reduce potential business interruption, you should develop a comprehensive response plan that includes:

• Pre-selecting restoration, roofing and mechanical vendors to ensure quick access to services when disaster strikes.
• Having established after-hours response expectations with your vendors so that urgent repairs can begin without delays.
• Developing a triage plan for which parts of the business must reopen first.
• Regularly reviewing and updating your response plan with your staff so that they are prepared and know the immediate steps that need to be taken following a catastrophe.

Understanding catastrophe claims expectations

One of the greatest challenges in catastrophe claims is managing expectations. It is important to remember that delays are generally caused by capacity strain rather than disputes over coverage. This is particularly true as natural events increasingly occur at the same time across multiple regions, placing greater pressure on all parties involved in the claims and repair processes.

The perils of underinsurance and outdated property valuations

Underinsurance is seldom obvious until disaster strikes. When a catastrophic event occurs, outdated declared values on insurance policies can lead to co-insurance penalties and insufficient coverage limits when you need your protection the most.

Furthermore, unclear policy wording, particularly regarding water damage and business interruption, can result in unexpected coverage gaps.

Understanding true replacement costs

Many property owners are caught off guard by the true replacement costs needed to fully rebuild after a catastrophe. While your building may be insured, it is crucial to consider the additional expenses that are often required, including:

• Demolition costs
• Debris removal
• Permits and planning costs
• Rebuilds in remote locations
• Professional fees
• Code upgrades
• Business interruption

As claims remain open for extended periods, expenses tend to escalate. Therefore, it is essential to account for permit, building and municipal delays, which can significantly increase your overall costs. Proactive planning and accurate policy valuations help avoid these pitfalls and support a smoother recovery process following a catastrophe.

Fraud risks rise when stress is high

Fraud spikes when people are stressed out and trying to reopen fast. Red flags to look out for include:

• Pressure to sign contracts immediately
• Vague scopes of work
• Duplicate invoicing
• Inflated drying/equipment delays
• Discouraging insurer involvement

You can protect you business by selecting reputable vendors and defining clear scopes of work. Implement a straightforward approval process and ensure invoices correspond with photographic evidence and site logs. Your insurer can also provide a list of pre-vetted vendors to better support you and help avoid fraud.

Resilience strategies don’t have to be expensive

There are simple steps that every business can take to be prepared at the beginning of every natural catastrophe season. These are simple, easy and inexpensive loss prevention steps to take for weather related perils. Remember, consistency is key.

“Resilience doesn’t have to be expensive – it just has to be consistent.”
Leah Wood

Hail risk mitigation

• Regularly clean and remove debris from your gutters to ensure proper drainage.
• Install protective shields or screens to protect any rooftop equipment and skylights.
• Ensure your equipment, vehicles and other valuable items are stored in a covered building, wherever possible, to avoid damage during a hailstorm

Water loss prevention

• Seal off your building by filling cracks and framing joints with waterproof sealant.
• Make sure there is no water staining or mould around windows and doors, at major walls joints and where walls meet the ground.
• Install a sump pump (preferably with a battery or generator as a backup in case the power goes out) and a sewer backup valve.
• Ensure any drainage systems extend at least two metres from your property.

Wildfire readiness

• Install and maintain fire suppression equipment.
• Utilize fire-resistant materials. 
• Ensure emergency services have access to your property.
• Properly store all combustible materials.
• Perform ongoing landscaping maintenance and vegetation management.

We’re here to support you with comprehensive planning for business protection

Protecting your business, employees and assets requires thorough and comprehensive planning. By taking the right steps to mitigate risk, developing a catastrophe response plan, keeping detailed and organized records, and ensuring vendor readiness, you are positioning your business for long-term success.

Be certain your business is ready for the next round of extreme weather — connect with an Acera Insurance advisor today to review your coverage and strengthen your risk management plan. 

FAQs

Related reading

• How builder’s risk insurance covers soft costs and delays
• Need to Know: Climate Change & Property Insurance
• How accurate property valuations protect your business

Leah Wood, FCIP, CRM, is Director, Claims & Loss Control at Acera Insurance. She brings 25 years of experience across claims and independent adjusting, as well as in-house loss prevention and risk management. Leah works with clients and internal teams to identify recurring loss drivers, strengthen readiness, and reduce the impact of complex events through practical risk management and post-loss guidance.

Interested in learning more? Connect with Leah Wood today at [email protected] or 604.828.9476.

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Information and services provided by Acera Insurance, Acera Benefits and any other tradename and/or subsidiary or affiliate of Acera Insurance Services Ltd. (“Acera”), should not be considered legal, tax, or financial advice. While we strive to provide accurate and up-to-date information, we recommend consulting a qualified financial planner, lawyer, accountant, tax advisor or other professional for advice specific to your situation. Tax, employment, pension, disability and investment laws and regulations vary by jurisdiction and are subject to change. Acera is not responsible for any decisions made based on the information provided.

The key difference between life insurance and mortgage insurance is who benefits and how coverage works. Mortgage insurance only pays off the remaining mortgage, while life insurance provides a lump sum your beneficiaries can use however they need.

This guide breaks down costs, control and long‑term value to help homeowners choose wisely.

With roughly two-thirds of adults classified as obese or overweight, Canadians are increasingly expecting their employer health plans to cover weight management drugs. The generic entry of semaglutide in Canada in 2026 may lower the price of the costly specialty drug to finally make this a financially viable option for many employers.

For nearly 30 years, Mike Sanderson has helped Canadian businesses balance employee health and group benefits plan sustainability. Drawing from this tenured experience, Mike explains why generic semaglutide may be the game changing scenario that moves obesity treatment into mainstream chronic disease coverage.

Ski holidays are one of the best parts about winter. But what if you want to chase snow around the world and hit the slopes year-round? 

Below are six destinations to consider when planning a ski trip in every season. 

January – February: Japan 

Japan might not be the first destination that comes to mind for many Canadians when planning a ski trip, but it offers some of the best snow in the world. The mountain regions of the northern island of Hokkaido get between 25 and 50 feet of snow in some areas and are renowned for deep, dry powder and high-altitude alpine terrain.  

You can also immerse yourself in local culture. What sounds better than a steaming bowl of ramen, followed by a soak in an onsen (hot spring) after a day on the slopes? While the season typically runs from November to April, peak conditions usually last from mid-January through February. 

March – April: Canadian Rockies 

Did you know that March has some of the year’s best snowfall days in areas like Banff, AB? With longer daylight hours and excellent spring conditions, the Canadian Rockies offer something for every skill level. 

High-altitude resorts such as Fernie, Kicking Horse and Lake Louise often see deep snowpacks, warmer temperatures and extended daylight hours. Softer snow can be ideal for beginner and intermediate skiers, while milder weather makes it easier to enjoy a drink on a patio between runs. 

May – June: Switzerland

Glacier skiing keeps the season going in Switzerland. Zermatt offers the highest skiing in Europe, with terrain reaching nearly 4,000 metres above sea level. The Matterhorn Ski Paradise is the highest ski area in the Alps and remains open year-round.

The runs might be a bit limited depending on snow quality, and strong sunscreen is essential at this altitude, but skiing on a glacier is an experience many travellers aim to cross off their bucket lists.

July – August: Chile

During North America’s summer months, winter is in full swing in the Southern Hemisphere. The Andes provide some of the best powder conditions, and Chile is known for its steep slopes, dramatic scenery and consistent snowfall. 

The ski season typically runs from June to September, and many of the country’s top resorts are within one to two hours of the capital, Santiago. 

September – October: New Zealand

New Zealand’s peak ski season also falls during the Northern Hemisphere’s summer, but September and October can bring excellent spring skiing. Skiers can expect longer sunny days, softer snow and more relaxed conditions. 

Warmer temperatures also mean lighter gear is often sufficient compared with earlier in the season. 

November – December: France

Early season skiing begins in late November at Val Thorens, Europe’s highest ski resort. The village sits at 2,300 metres in the French Alps and is part of the world’s largest linked ski area, offering 600 km of downhill terrain and 300 km of cross-country trails. 

France is also known as the birthplace of après-ski culture, ensuring plenty of options for food, drinks and entertainment after a day on the slopes. 

Remember your travel insurance 

Before you book your next ski adventure, don’t forget to factor in adventure travel insurance, especially if you are doing high-risk activities like backcountry skiing. Common coverages include:  

• Emergency medical expenses 
• Trip delays or cancellations 
• Lost luggage 

Wherever you travel, Acera Insurance ensures peace of mind. In partnership with TuGo, a leading Canadian travel insurer, Acera offers an online self-serve platform to quickly purchase coverage. 

If you have more complex needs, our advisors can help you find the right coverage. Email [email protected] today. 

Information and services provided by Acera Insurance, Acera Benefits and any other tradename and/or subsidiary or affiliate of Acera Insurance Services Ltd. (“Acera”), should not be considered legal, tax, or financial advice. While we strive to provide accurate and up-to-date information, we recommend consulting a qualified financial planner, lawyer, accountant, tax advisor or other professional for advice specific to your situation. Tax, employment, pension, disability and investment laws and regulations vary by jurisdiction and are subject to change. Acera is not responsible for any decisions made based on the information provided.

When you buy a condominium for the first time, particularly if you’re downsizing, it’s easy to assume condo living will simplify your insurance. In reality, it introduces new layered risks driven by bylaws, deductibles and loss-assessment exposure. 

Many owners don’t realize condo bylaws can dictate how losses are allocated, regardless of fault. For high-net-worth individuals, the financial consequences of misunderstanding these rules can be significant. 

Christina Windall, Client Executive, Signature by Acera Insurance, explains why it’s important to understand how a condo corporation’s master policy and your personal insurance policy must work together to protect your unit and personal exposures. 

The condo master policy myth: Where coverage commonly breaks down 

It’s easy to mistake your condo corporation’s master policy for full coverage, but in practice there are often gaps that can leave owners exposed and underinsured after a claim. 

Improvements, betterments and personal contents inside a unit are not covered under the master policy. These must be insured under the owner’s personal policy. 

“The meat and the potatoes of the risk is in the bylaws – and that’s what people overlook.” 
— Christina Windall 

For example, after a flood, the corporation typically pays to restore the unit to its original, builder‑grade condition if the commercial policies deductible threshold has been met. If floors, appliances, or countertops have been upgraded, the additional cost to replace those improvements falls to the owner’s personal insurance. Condominium claims are complex due to provincial and territorial legislations, regulations and rules associated with condo buildings. 

Rising weather‑related claims have led many luxury condo buildings to increase deductibles on their commercial policies for perils such as flooding and earthquakes to manage premiums. This shifts more financial risk onto unit owners. In response, new standalone products have emerged to help cover deductible shortfalls. 

It’s also important to note that deductibles can be charged back to owners – even when they are not at fault. Reviewing both the master and personal policies together is essential to identify and address coverage gaps. 

Improvements vs. betterments: How condo renovations become a costly coverage trap

Say your oven breaks and you decide to replace it with a newer model of the exact same oven. You would probably consider the new oven a simple replacement, right? Unfortunately, your new oven may now qualify as a betterment under your condo’s bylaws. 

A replacement restores an item’s original function. A betterment improves it by increasing efficiency, capacity or useful life. Some bylaws classify any replacement as a betterment, regardless of materials used. That distinction can create unexpected gaps in coverage. 

When making any additions, alterations or renovations to the unit, owners should advise their insurer as soon possible so coverage can be adjusted. Detailed records – such as invoices, plans and photos – are essential to support replacement values with the unit especially in older condos.

Insuring contents and improvements for full replacement costs can remove any ambiguity during a claim. If you feel the full replacement costs of the contents of your unit would be $800,000 that amount should be insured to avoid disputes at a later date. 

Condo loss assessments and deductible chargebacks: Where owners pay first

Water remains a leading source of condo claims. In a major water damage event, such as burst pipes, owners are often surprised by the order of payment – and by how quickly personal exposure arises. 

Typically, the corporation’s policy responds first with deductibles charged back to the originating unit. If the master policy’s deductible threshold is not met, the client’s personal policy would need to respond. 

“People want to know the insurance cost – but they don’t want to read the bylaws, even though that’s where the real exposure lives.” 
— Christina Windall 

Robust protection means having unit‑assessment coverage with limits high enough to cover potential chargebacks. Personal policy limits for betterments and improvements need to reflect the true value of improvements or betterments in the unit. The full value of personal items in the condo should be insured as coverage is often paid out on a replacement cost basis. Owners should understand any caps that apply. 

In some cases, a separate policy may be required to address deductible shortfalls, or owners may need to work with an insurer that offers higher assessment limits. Reviewing bylaws wording with your insurance advisor is strongly recommended and encouraged. 

Why condo bylaws matter more than policy wording

Every condo corporation functions like its own small government. No two sets of bylaws are the same. 

For high‑net‑worth buyers, reviewing bylaws should be a core part of the purchase and risk‑assessment process. Key documents to examine include: 

Claims history: Look for the frequency and severity of past losses. 

Unit entitlement documents: These determine each unit’s financial responsibility within the corporation. 

Reserve fund reports: Review the timing of major repairs and replacements to common property. 

Bylaws: These outline deductible chargebacks, renovation rules and water‑damage responsibility. 

Together, these documents provide a clearer picture of potential financial exposure. 

Conclusion

For affluent condo owners, effective insurance protection depends on aligning bylaws, the master policy and personal coverage before a loss occurs.  

That means reviewing condo documents with the same care as investment statements, matching deductible limits to real exposure and treating condo insurance as an integrated risk strategy – not a checkbox. 

FAQs: An overview of insurance blind spots for luxury condo owners

Since 2012, Christina has specialized in building strong client-broker relationships, prioritising her clients’ needs and providing expert support. With over ten years of insurance industry experience, she also operated a drywall company and worked as a construction contractor for two years. Christina holds CAIB and CIP certifications. 

You can contact Christina Windall at [email protected] or 604.235.1852 

Related reading:

• The importance of excess liability for high-net-worth individuals
• Why you should talk to an insurance expert first before buying a luxury vehicle
• How to optimize your insurability as a high-net-worth individual

Get weekly tips to protect your business!
Subscribe to our LinkedIn Newsletter. Our advisors’ insights will help you Be Risk Ready.

Subscribe on LinkedIn

Information and services provided by Acera Insurance, Acera Benefits and any other tradename and/or subsidiary or affiliate of Acera Insurance Services Ltd. (“Acera”), should not be considered legal, tax, or financial advice. While we strive to provide accurate and up-to-date information, we recommend consulting a qualified financial planner, lawyer, accountant, tax advisor or other professional for advice specific to your situation. Tax, employment, pension, disability and investment laws and regulations vary by jurisdiction and are subject to change. Acera is not responsible for any decisions made based on the information provided.

Your insurance policy acts as a safety net for your finances. It’s designed to cover incidents you wouldn’t be able to pay for out of pocket and the more claims you have can lead to higher premiums and impact your eligibility for insurance coverage.

How claims can impact your premiums

Every claim you file, regardless of the amount, will be listed on your claims record. Before filing a claim, it’s important to remember:

• Claims can increase your premiums at renewal.
• Your claims history follows you, even if you switch insurers.
• Multiple claims may result in at least 10-20% premium increases or make you ineligible for certain coverages.
• Some insurers offer claims free discounts.

Is your claim worth more than your deductible?

Your deductible is what you pay out of pocket for each insurance claim. We recommend filing a claim if it’s at least double your deductible.

For example:

• Deductible: $1,000
• Damage: $1,200
• Insurer pays: $200

In this case, paying out of pocket would make more sense.

When to consider paying out of pocket

There are certain instances when paying out of pocket for a claim would make more sense financially or that your policy would not cover. They can include:

• Repair costs that are lower than your deductible.
• Damage that is due to wear, neglect, or maintenance issues such as long-term roof leaks or pest infestations.
• Being unable to prove ownership or damage (keep receipts, photos and a regularly updated home inventory to avoid this).

When to file an insurance claim

File a claim if:

• Damage is significant and costs will exceed your deductible.
• Anyone is injured (no matter how minor).
• A police report is required.
• Another driver is at fault in an accident.

Don’t forget to document everything when making an insurance claim. Take photos, provide receipts and keep a written record of everything to support your claim.

Most insurers have strict time limits for submitting a claim, so it is important to contact your insurer and your Acera Insurance advisor as soon as possible to avoid missing your opportunity for coverage.

Questions?

If you’re ever in doubt about whether or not to file a claim, contact your Acera Insurance advisor. We’re happy to provide you with advice and next steps to move forward in the claims process.

In my November 2024 piece, I framed geopolitical risk as a fast-rising external pressure; one that Canadian businesses needed to take seriously as the global trade, security and diplomatic environment shifted. At the time, the conversation (for many organizations) still lived largely in the “strategic” bucket: important, watch closely, scenario-plan, but often not fully integrated into day-to-day enterprise decision-making.

It’s 2026 — and how the world has changed. The Canadian reality has tightened and not in a theoretical way. Geopolitics has moved from “macro context” to operational constraint. It now shows up inside:

• procurement decisions
• contract language
• cybersecurity posture
• cross-border data decisions
• financing conditions
• board governance expectations

The World Economic Forum’s Global Risks framing reinforces this direction: geopolitical and geoeconomic confrontation increasingly behaves as a systemic driver that interconnects economic, technological, societal and security risks rather than sitting in isolation.

Reclassifying geopolitical risks in 2026: From strategy to operations

Historically, geopolitical risk was treated as a macro-strategic overlay, relevant to foreign expansion decisions, foreign direct investment or crisis response planning, but largely disconnected from day-to-day enterprise risk management (ERM). That classification no longer holds.

What has changed is not merely “more instability.” It’s that geopolitics now behaves like a systemic risk amplifier, increasing correlation between risk categories that used to be modeled independently (supply chain vs. cyber, regulatory vs. financial, contracts vs. operational continuity). The World Economic Forum captures this directly through its framing of structural forces and interlinked risks across time horizons.

For Canadian organizations, this reclassification shows up in measurable, operational ways:

• Volatility in input pricing and availability, especially where supply is concentrated, route-dependent or politically sensitive.
• Higher frequency of regulatory and trade policy change, including sudden enforcement shifts.
• Elevated cyber threat activity, aligned with geopolitical objectives, not just criminal profit.
• Contractual uncertainty, sanctions clauses, export controls, force majeure disputes, payment disruptions.
• Greater scrutiny of capital sources, ownership structures and counterparties, especially for critical sectors and sensitive technologies.

In other words: geopolitics now directly influences loss frequency, loss severity and tail-risk exposure across multiple risk categories because it changes the rules of performance, payment and access.

Why strategic competition defines 2026 business risk

The defining geopolitical feature of 2026 is not generalized instability, but strategic competition between major power blocs.

Unlike prior eras of globalization, this competition is not limited to trade volumes or military posture. It extends into the operational mechanics of business:

• industrial policy and subsidies (who gets to build what, and where)
• export controls and technology restrictions
• investment screening and ownership limitations
• data localization and digital sovereignty
• critical minerals, energy security and infrastructure control

The International Monetary Fund (IMF) describes the rise of geopolitical factors shaping economic conditions and cross-border flows, while the Organization for Economic Co-operation and Development (OECD) highlights geopolitical risk as a driver of trade and investment uncertainty and resilience considerations.

The “best” supplier, route, jurisdiction or customer is not only the one with the best economics, it’s the one that remains viable under shifting policy and alignment conditions.

For Canadian businesses — particularly in manufacturing, energy, mining, transportation and technology — this creates structural exposure, not episodic risk.

If your margins, timelines or service delivery depend on a narrow set of jurisdictions, routes or restricted technologies, geopolitics is already in your operating model (whether you’ve admitted it in ERM or not).

How geopolitics has changed cyber risks for business

One of the most consequential developments since 2024 is the formal convergence of cyber risk and geopolitical strategy.

The National Cyber Threat Assessment 2025–2026 confirms that state-aligned cyber activity targeting Canadian organizations is increasing in both sophistication and strategic intent. These operations are not purely criminal; they are often aligned with broader geopolitical objectives, including economic disruption, intelligence gathering and strategic influence.

The key point for risk leaders is that cyber incidents should not be modeled purely as opportunistic crime. In a geopolitically tense environment, cyber can be used for strategic disruption, intelligence collection and influence and the private sector is often where those objectives land first.

From a risk perspective, this changes three things:

Threat motivation shifts from opportunistic to strategic (persistence and targeting improve).

Attack timing correlates with geopolitical events (escalations, sanctions, elections, diplomatic flashpoints).

Impact scope expands beyond financial loss to include regulatory, reputational, operational, and national-security implications.

The Allianz Risk Barometer 2026 reinforces this shift, ranking cyber incidents as the leading global business risk (for the fifth year in a row with its highest score ever — 42% of responses) while explicitly linking escalation to geopolitical tension.

And Canada’s cyber guidance also notes that geopolitical events can drive fluctuations in cybercrime activity — useful confirmation that “geopolitical correlation” isn’t just a theory.

For Canadian organizations, cyber risk now needs to be modeled as:

• A systemic enterprise risk (not an IT-only risk).
• A potentially state-linked exposure (even when the initial entry looks “criminal”).
• A board-level governance issue (consequences increasingly span operations, finance, legal and reputation).

The geopolitical nature of modern supply chains

Global supply chains in 2026 are no longer optimized primarily for cost or speed. They are optimized (often imperfectly) for resilience under geopolitical stress.

Key structural changes include:

• Multi-jurisdiction sourcing strategies (to avoid single-point geopolitical failure).
• Politically informed supplier selection (viability under sanctions/export controls matters).
• Increased contractual complexity (substitution rights, termination triggers, compliance representations).
• Greater use of inventory buffers for strategic inputs (accepting carrying cost to reduce interruption risk).

The Bank of Canada explicitly notes elevated geopolitical uncertainty and highlights that escalation disrupting supply chains and commodity markets can raise inflation and slow activity, with markets potentially demanding higher risk premiums (raising borrowing costs and weakening confidence).

For Canadian firms in logistics, manufacturing, energy, hospitality, and food supply, the practical shift is this:

• Supply chain risk is now strategic, not merely operational.
• Persistent, not cyclical.
• Board-relevant, not back-office.

Canada’s geopolitical position and business risk in 2026

Canada occupies a distinctive geopolitical position:

• Deep economic integration with the United States.
• Alignment with major allies and security partners (including NATO, the G7, and Five Eyes).
• Resource intensity in energy and critical minerals.
• Growing exposure in data-driven and professional services.

This positioning creates opportunity, but also downstream vulnerability. Canadian firms are frequently impacted by geopolitical decisions made by larger actors, particularly in trade, sanctions, technology restrictions and security policy.

The Bank of Canada reinforces the reality that Canada’s outlook carries unusually high risk when geopolitical uncertainty is elevated and North American trade dynamics are under review.

Geopolitics as embedded business infrastructure

When I wrote about geopolitical risk in November 2024, the message was fundamentally a warning: the world was shifting and Canadian organizations needed to widen their aperture, especially around trade posture, regulatory volatility and security dynamics.

What’s changed since then is not that geopolitics has become more important, it’s that it has become more embedded. The risk is no longer primarily episodic, where businesses prepare for “events.”

Instead, geopolitical pressure increasingly arrives through mechanisms that can change the rules of performance overnight: sanctions and export controls, technology restrictions, data sovereignty expectations, supply-chain chokepoints and cyber activity that is increasingly aligned with strategic objectives.

This is exactly why part 1 focuses on reclassification. In part two, we’ll translate this environment into practical scenario pathways and leading indicators for Canadian sectors.

And in part three, we focus on risk transfer. When geopolitics drives correlated disruption, insurance can’t be a once-a-year transaction — it has to be a layered risk transfer stack aligned to Canadian realities, with wording and triggers that won’t stall claims when the environment shifts. Done well, it turns insurance into strategic infrastructure.

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Aliya Daya, Senior Client Executive, specializes in risk management strategies and insurance solutions for the technology sector, as well as disruptive and emerging industries. With more than 25 years of experience in the insurance industry, Aliya serves as a Cyber Technical Specialist and National Mixed Practice Team Lead at Acera Insurance. She specializes in innovation, technology, cyber insurance and privacy breach, political risk, manufacturing / fabrication / wholesale / distribution, hospitality, non-profit and faith-based organizations.

You can reach Aliya at 403.717.5895 or [email protected]

Related reading:

• Part 2: Managing geopolitical risks in 2026: Technical frameworks for Canadian organizations
• Part 3: Risk transfer strategy for Canadian businesses facing geopolitical risks

Information and services provided by Acera Insurance, Acera Benefits and any other tradename and/or subsidiary or affiliate of Acera Insurance Services Ltd. (“Acera”), should not be considered legal, tax, or financial advice. While we strive to provide accurate and up-to-date information, we recommend consulting a qualified financial planner, lawyer, accountant, tax advisor or other professional for advice specific to your situation. Tax, employment, pension, disability and investment laws and regulations vary by jurisdiction and are subject to change. Acera is not responsible for any decisions made based on the information provided.

The first part of this series made the case for reclassification: geopolitical risk isn’t a periodic external shock anymore – it’s embedded.

It shows up as policy, constraint and correlated disruption across supply chains, cyber, contracts, capital and governance. The World Economic Forum’s risk framing supports this “systems” view: geopolitics and geoeconomics are increasingly interlinked with economic, technological and societal risk pathways rather than existing as a standalone category.

This second article is about what to do with that reality. Not in the “read more headlines” way, but in the “build a repeatable operating discipline” way.

This is also where Canadian organizations have an advantage: we’re used to operating in a rule-dense environment (cross-border trade, regulated financial markets, privacy / security expectations).

The goal is to turn that institutional muscle into decision readiness, so geopolitics becomes measurable, governable and insurable where appropriate.

Integrating geopolitical risk into ERM

The first step is structural: geopolitical risk needs to be explicitly recognized within enterprise risk management (ERM), not treated as “context.” The WEF’s approach to interconnected risks and the emphasis on scenario planning over linear prediction reinforces why ERM integration matters.

Practical ERM integration for geopolitical risk

Executive ownership (RACI, not vibes)

Assign a clear executive owner (often COO / CRO / GC depending on the organization) and define cross-functional accountability across:

• Legal/Compliance (sanctions, export controls, contracting)
• Procurement/Supply Chain (concentration, substitution, route risk)
• IT/Security (threat posture, incident readiness)
• Finance/Treasury (liquidity, cost-of-capital sensitivity)
• Communications/HR (reputation, workforce impacts)

A real risk appetite statement

This is the difference between “we care about geopolitics” and “we can make decisions.” Examples of appetite thresholds:

• Maximum dependency on a single jurisdiction for critical inputs
• Maximum % revenue tied to politically volatile regions
• Tolerance thresholds for beneficial ownership opacity in counterparties
• Minimum continuity requirements for critical vendors (including cloud/SaaS)

A usable taxonomy (so you can measure it)

Instead of one bucket called “geopolitics,” define sub-risks with KRIs:

• Sanctions/countersanctions
• Export controls / technology restrictions
• Trade policy and customs disruption
• Data localization / digital sovereignty divergence
• Critical minerals and energy security constraints
• Cyber escalation aligned with geopolitical events

Link to the risks you already manage

Geopolitical drivers should be explicitly linked to:

• Operational interruption (delivery failure, delay, supplier outage)
• Compliance/Legal risk (ability to perform, pay, insure)
• Cyber risk (event likelihood and correlation)
• Financial risk (liquidity, margin compression, borrowing costs)

Why scenario planning works better than forecasting for geopolitical risks

Geopolitical risk does not behave like a forecastable curve. It behaves like discontinuities — policy switches, enforcement changes and correlated cyber/supply shocks. So, the technical shift is from prediction to scenario architecture.

Build scenarios as decision tools

Your scenario set should include “families” that reflect how geopolitics actually hits operations:

• Trade escalation / tariff shock (fast policy changes, customs enforcement)
• Sanctions expansion (new listed entities, sector restrictions, payment friction)
• Export controls / tech restriction (licensing delays, prohibited transfers, vendor constraints)
• Cyber escalation aligned to conflict (disruption, influence, intelligence collection)
• Regulatory divergence (data localization/security requirements; procurement restrictions)

Standardize five outputs per scenario

If you want this to be operational (not academic), every scenario should produce:

• Exposure map: where you touch it (vendors, routes, customers, jurisdictions, systems)
• Impact pathways: how it becomes loss (delay, interruption, illegality, cyber incident, reputational shock)
• Decision triggers: what event changes your posture (new sanctions listing, export-control update, threat-level spike)
• Control posture: what you tighten immediately (approvals, routing, segmentation, supplier substitution, monitoring)
• Insurance implications: high-level assumptions on what might respond, what might have friction (learn more in part three)

The WEF’s “interconnected risks” framing is your justification for scenario architecture: once risks are correlated, you need structured decision readiness rather than one-dimensional forecasts.

Stress test supply chains for geopolitical risks

Supply chains should be tested as geopolitical systems, not just operational networks. This is where Canadian organizations can materially reduce tail risk.

Map tier dependencies (Tier 1–3 and “hidden concentration”)

• Identify Tier 1 suppliers for critical inputs
• Where feasible, map Tier 2–3 concentration (same region, same upstream producer, same chokepoint)
• Flag “single points of geopolitical failure” (jurisdictional or route concentration)

Reverse stress test (start with failure)

Instead of asking “how likely is a disruption,” ask: “What geopolitical event would cause us to fail to deliver within 15/30/60/90 days?” Then work backward to determine minimum resilience measures:

• Secondary suppliers approved and contract-ready
• Route alternatives pre-negotiated
• Minimum buffer inventory for strategic inputs
• Pre-approved substitutions and engineering alternatives
• Clear customer communication protocols

Contract engineering (contracts are resilience tools)

Build clauses that support survivability:

• Substitution rights for critical inputs
• Sanctions/export-control representations and termination triggers
• Force majeure language aligned to realistic disruption patterns
• Vendor continuity and notification obligations

The OECD’s work on geopolitical risks and trade resilience supports the idea that resilience has become a structural requirement as trade faces disruption and fragmentation pressures.

Integrate cyber risk with geopolitical intelligence

Cyber is now one of the cleanest channels through which geopolitical competition expresses itself in the private sector. Canada’s National Cyber Threat Assessment 2025–2026 describes a threat environment affecting Canadian organizations involving both state and non-state actors and emphasizes evolving risks to critical infrastructure and broader targets.

A geopolitically mature cyber program adds four components

Geopolitical threat triggers into cyber posture

• Define what events raise your threat level (sanctions escalation, conflict events, diplomatic flashpoints)
• Pre-map what changes operationally when threat levels rise (monitoring, access controls, vendor restrictions)

Scenario-based simulations (not generic tabletop exercises)

Run simulations that assume:

• Timing aligned with geopolitical escalation
• Simultaneous vendor outage or supply disruption
• Pressure on communications and executive decision-making

Cross-functional crisis response

Cyber response must integrate legal, communications, operations and leadership, especially if there are regulatory notifications, contractual obligations or reputational narratives to manage.

Insurance alignment

At this stage, the principle is simple: if cyber events are more correlated with geopolitical conditions, you should align incident response planning with policy wording realities and exclusions.

Allianz continues to rank cyber incidents as the top business risk globally in 2026, reinforcing how central cyber has become to enterprise risk posture.

Establish continuous trade, sanctions and regulatory monitoring

Trade and regulatory environments are no longer stable enough for periodic review. Continuous monitoring is now a controls issue.

What continuous monitoring looks like in practice

• Sanctions and export-control monitoring with defined escalation paths.
• Periodic counterparty screening (including beneficial ownership where possible).
• Vendor and customer onboarding controls that include jurisdictional exposure checks.
• Engagement with trade counsel and industry associations (especially for exporters).
• Financial modeling that includes policy volatility (tariffs, duties, delays, denied transactions).

Elevate board and governance oversight on geopolitical risks

Boards increasingly expect management to articulate:

• How geopolitical risk affects strategy and operating resilience
• Where the organization is most exposed
• What controls and mitigation mechanisms exist
• How risk transfer aligns (and where it won’t)

Canadian regulators have been explicit that geopolitical tensions connect to integrity and security risks (including sanctions, cyberattacks, foreign interference and money laundering). OSFI’s risk outlook language underscores that these factors are not theoretical, they are supervisory and resilience priorities.

Practical governance mechanisms:

• Assign executive accountability and board-level oversight
• Include geopolitical scenarios in board education (brief, structured, decision-oriented)
• Require quarterly reporting on KRIs and scenario triggers
• Stress test decisions (what would we do if X happens next week?)

Using insurance strategically for geopolitical risk

Insurance remains an important tool for geopolitical risk management, but it must be used with precision. In this series, part three will go deep on market realities, wordings and claims friction points. Here, the objective is strategic placement of risk transfer inside your broader resilience program.

Common risk transfer pillars that often connect to geopolitical pathways

• Political risk insurance (expropriation, political violence, contract frustration – where relevant/applicable)
• Trade credit insurance (counterparty non-payment, political risks affecting payment – structure dependent)
• Cyber insurance (incident response and loss pathways; alignment with policy wording matters)
• Directors and officers (D&O) liability (governance scrutiny, disclosure expectations, stakeholder actions)
• Contingent business interruption / supply chain (structure varies heavily; requires careful dependency mapping)

From awareness to advantage in a geopolitically fragmented world

Geopolitical volatility is not a passing phase. It is a defining operating condition, and it is increasingly measurable through the same channels ERM already manages: interruption, compliance friction, cyber events, capital pressure and governance expectations.

Canadian organizations that formally integrate geopolitical risk into ERM, scenario architecture, cyber resilience, supply-chain stress testing and board oversight will reduce downside exposure, but they’ll also demonstrate something underwriters, lenders and counterparties quietly reward: durability.

FAQs

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Aliya Daya, Senior Client Executive, specializes in risk management strategies and insurance solutions for the technology sector, as well as disruptive and emerging industries. With more than 25 years of experience in the insurance industry, Aliya serves as a Cyber Technical Specialist and National Mixed Practice Team Lead at Acera Insurance. She specializes in innovation, technology, cyber insurance and privacy breach, political risk, manufacturing / fabrication / wholesale / distribution, hospitality, non-profit and faith-based organizations.

You can reach Aliya at 403.717.5895 or [email protected]

Related reading:

• Part 1: Geopolitical and business risk trends for 2026: A Canadian perspective
• Part 3: Risk transfer strategy for Canadian businesses facing geopolitical risks

Information and services provided by Acera Insurance, Acera Benefits and any other tradename and/or subsidiary or affiliate of Acera Insurance Services Ltd. (“Acera”), should not be considered legal, tax, or financial advice. While we strive to provide accurate and up-to-date information, we recommend consulting a qualified financial planner, lawyer, accountant, tax advisor or other professional for advice specific to your situation. Tax, employment, pension, disability and investment laws and regulations vary by jurisdiction and are subject to change. Acera is not responsible for any decisions made based on the information provided.

In part one, I reframed geopolitics as an embedded operating condition for Canadian organizations, not a periodic external shock. Part two laid out the practical architecture: integrate geopolitical scenarios into enterprise risk management (ERM), stress-test supply chains, align cyber with geopolitical intelligence and elevate governance.

This third article is about the part that tends to get flattened into “renewal season admin:” risk transfer.

The angle here is deliberately Canadian and deliberately strategic: think of insurance as a risk transfer stack (a set of layers that match different geopolitical loss pathways) built for Canada’s unique position:

• deep U.S. integration
• allied alignment
• resource intensity (energy and critical minerals)
• increasing exposure through tech/data-driven services

The World Economic Forum’s current framing reinforces why this matters: geopolitical / geoeconomic risks act as systemic amplifiers that connect and compound risks across domains rather than staying neatly siloed.

Canadian business case study: How geopolitical risk shows up in everyday operations

A Canadian founder I work with once described their risk environment like this: “We’re not ‘international.’ We just sell to the U.S., use a global cloud provider and have a couple overseas suppliers. That’s not geopolitical.”

And that’s the trap. In this operating environment, geopolitics doesn’t require a flag on the invoice. It arrives through:

• A supplier delay caused by trade friction or transport disruption
• A ransomware campaign that spikes around geopolitical tension
• A sanction update that changes who can pay whom and how
• A sudden increase in the cost of capital when markets demand a higher risk premium

The Bank of Canada has explicitly highlighted that geopolitical escalation can disrupt supply chains and commodity markets and that financial markets may demand higher risk premiums, raising borrowing costs and weakening confidence.

Why Canadian businesses need a layered insurance approach to respond to geopolitical risks

In a stable world, “coverage shopping” can look like competence. In a fragmented world, it becomes fragile.

A risk transfer stack is a layered approach that matches different loss pathways, different time horizons and different stakeholders. It recognizes that not all risks should be transferred and not all risks can be transferred, especially when events are correlated.

Layer 0: The retained layer (your volatility budget)

Before we touch insurance, we need honesty: what volatility can the organization absorb without distorting decisions?

This is where CFOs and boards should pay attention. Retentions are not just pricing levers. They are your self-insured shock absorber, and they matter more when borrowing costs and risk premiums move.

Board-level question: If we had a bad 30 days (cyber disruption + supplier delay + customer penalties) how much can we fund internally before we’re making reactive, expensive decisions?

Layer 1: High-frequency operational resilience insurance

This layer covers the risks that show up most often in modern Canadian operating environments, where the goal is not “catastrophe funding,” but continuity and response speed.

Cyber: response infrastructure plus balance-sheet protection

Cyber remains the top ranked global business risk in Allianz’s Risk Barometer 2026 (highest-ever score, 42%). Canada’s National Cyber Threat Assessment underscores that Canadian organizations face an evolving threat landscape involving both state and non-state actors.

In the stack, cyber insurance is less about “if we get hacked” and more about pre-negotiated access to capability:

• Incident response vendors
• Breach counsel
• Forensics
• Crisis communications
• Funding for immediate containment/restoration

This is especially important for Canadian firms with cross-border customers and data dependencies, where incident handling rapidly becomes a governance and stakeholder confidence issue.

Crime / social engineering / funds transfer risk

Geopolitical periods tend to correlate with disinformation, impersonation and sophisticated social engineering, especially around payments, vendor changes and executive approvals.

This layer is not glamorous, but it is one of the most practical forms of continuity protection.

Layer 2: Liability and governance protection (where leadership scrutiny lives)

This is the “your decision-making will be judged later” layer.

Directors and officers (D&O): protecting decision-makers in uncertainty

Cyber incidents and operational disruptions frequently create governance scrutiny: what did leadership know, what did they do and how did they communicate? Canadian securities guidance on cyber disclosure (CSA Staff Notice 51-347) reinforces expectations around disclosure of cybersecurity risks and incidents for issuers.

Even when allegations don’t succeed, defence costs and distraction can be material. In a geopolitical operating environment, D&O is not just about fraud or misstatement, it’s about decision-making under uncertainty.

Errors and omissions (E&O) / Professional Liability

For Canadian tech and professional services firms (especially those selling into the U.S.) contract performance, service availability and security representations are increasingly litigated. This layer helps protect the enterprise when the dispute is about “did you meet what you promised?” rather than “did you mean harm?”

Layer 3: Trade, political and “Canada’s cross-border reality” risk transfer

This is where the Canadian angle becomes very real. Canada’s economy is deeply integrated with the U.S., and many Canadian firms are “international” by dependency even if they’re not by branding. That makes trade-related volatility and counterparty friction a strategic exposure.

Trade credit: protecting receivables when defaults have political DNA

In a fragmented world, non-payment isn’t always a simple credit issue. It can be driven by policy constraints, sudden demand shocks or market access restrictions. Reuters reported increased Canadian exporter interest in trade insurance as tariff uncertainty increased risk and highlighted the role of Export Development Canada.

Political risk: not just “emerging markets” anymore

Political risk is increasingly structural: contract frustration, regulatory intervention, forced divestment pressures, currency transfer constraints. Even when Canada isn’t the protagonist, Canadian firms can be downstream of larger geopolitical decisions.

And sanctions compliance is not an abstract concept. Global Affairs Canada provides sanctions guidance for the financial sector (including insurers) emphasizing ongoing monitoring and compliance expectations.

Translation: the legal environment can influence both operations and claims mechanics.

Layer 4: Physical supply chain and interruption realities (where most assumptions break)

Here’s where many organizations discover that they bought the idea of business interruption, not the version that matches their risk.

The Insurance Bureau of Canada explains business interruption insurance in a way that highlights a key issue: business interruption is typically tied to covered events and how the policy is structured, often linked to physical damage concepts unless specialized coverage is arranged.

In geopolitical disruption, interruptions often occur without physical damage:

• Port congestion
• Route disruption
• Embargoes
• Regulatory shutdowns
• Vendor outages

This doesn’t mean business interruption insurance is “bad.” It means business interruption insurance has to be structured around realistic interruption scenarios, often via contingent/dependent forms and carefully negotiated triggers.

3 ways to engineer a risk transfer stack that withstands geopolitical risk

This is where the thought leadership lives: not “buy all the policies,” but engineer the stack so it holds under stress.

Don’t optimize for premium, optimize for claim mobility

In geopolitically correlated events, speed matters. A program that is technically “broad” but practically slow can create more damage than it prevents.

Treat wording as strategy

The market has tried to clarify boundaries around cyber war/state-linked systemic events; the Lloyd’s Market Association publishes cyber war clauses that demonstrate how wordings attempt to define these boundaries. You don’t need to be a coverage lawyer, but you do need to know which clauses create ambiguity in the scenarios you care about.

Use the stack to support Canada’s strategic opportunities

Canada’s opportunity set (critical minerals, energy and tech-enabled services) comes with geopolitical exposure. A well-designed risk transfer stack is part of how Canadian firms pursue growth while controlling downside volatility.

Building a geopolitically resilient risk architecture in Canada

In a geopolitically fragmented environment, risk transfer can’t be evaluated solely by premium, limits or renewal outcomes. It needs to be evaluated by whether it supports:

• Continuity under disruption
• Defensible governance under scrutiny
• And balance-sheet resilience when capital gets tighter

The World Economic Forum’s systemic framing and the Bank of Canada’s emphasis on elevated geopolitical uncertainty and risk premium dynamics are not just macro commentary, they are signals that volatility is not temporary.

FAQs

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Aliya Daya, Senior Client Executive, specializes in risk management strategies and insurance solutions for the technology sector, as well as disruptive and emerging industries. With more than 25 years of experience in the insurance industry, Aliya serves as a Cyber Technical Specialist and National Mixed Practice Team Lead at Acera Insurance. She specializes in innovation, technology, cyber insurance and privacy breach, political risk, manufacturing / fabrication / wholesale / distribution, hospitality, non-profit and faith-based organizations.

You can reach Aliya at 403.717.5895 or [email protected]

Related reading

• Part 1: Geopolitical and business risk trends for 2026: A Canadian perspective
• Part 2: Managing geopolitical risk in 2026: Technical frameworks for Canadian organizations

Information and services provided by Acera Insurance, Acera Benefits and any other tradename and/or subsidiary or affiliate of Acera Insurance Services Ltd. (“Acera”), should not be considered legal, tax, or financial advice. While we strive to provide accurate and up-to-date information, we recommend consulting a qualified financial planner, lawyer, accountant, tax advisor or other professional for advice specific to your situation. Tax, employment, pension, disability and investment laws and regulations vary by jurisdiction and are subject to change. Acera is not responsible for any decisions made based on the information provided.

Cyber threats have shifted from being an abstract IT concern to an operational and financial risk that can halt municipal services.

Municipalities that plan cyber investment the same way they budget for roads, water systems or fleet maintenance are better positioned to safeguard continuity of operations.

Treating cyber preparedness as core infrastructure, not discretionary spending, can help protect insurability, public trust and service resilience.

5 reasons why Canadian municipalities are prime cyber targets

Ransomware, phishing, vendor breaches and business email compromise routinely target local governments because of the critical services they deliver and the pressure to restore operations quickly.

The result is a higher likelihood of ransom payment, financial fallout and significant recovery costs that extend far beyond the breach itself.

Cyber threat 1: Essential municipal services rely on IoT and OT

The mass digitization of municipal operations means cybercriminals know it can take just one successful breach to rapidly disable phone systems, portals, scheduling systems, citizen-facing services and essential infrastructure.

Unsurprisingly, the Canadian Centre for Cyber Security has noted increasing attacks against municipal governments, with most cases involving:

• social engineering
• unauthorized network access
• ransomware

Case study: City of Cold Lake, AB, ransomware attack

In July of 2024, the City of Cold Lake experienced a ransomware attack, which caused widespread disruption. The breach impacted the municipality’s phone systems, payment processes and email communication across all facilities, including:

• City hall
• Energy centre
• Family and Community Support Services (FCSS)
• Public works
• Marina
• Golf course
• Transfer station

The recovery period to reinstate all systems and services took several weeks.

Cyber threat 2: Municipalities store large volumes of personal information

Personally identifiable information (PII) for staff, residents, patrons and donors is kept on file across municipal departments and affiliated agencies. Data theft resulting from a breach can lead to mass notifications, regulatory attention and lengthy recovery times.

Case study: Toronto Public Library ransomware attack

In October 2023, the Toronto Public Library experienced a ransomware attack, in which their data was exfiltrated and encrypted. In addition to months-long system disruptions, Ontario’s privacy regulatory commission reported the breach affected the personal information of approximately:

• 8,000 staff members
• 4,100 customers, donors and volunteers
• 1,800 beneficiaries

Cyber threat 3: Municipalities rely on third-party and shared platforms

The use of shared platforms and third-party IT services for functions such as HR, payroll, public health information, file transfers and more puts municipalities at risk of a breach. Cybercriminals are increasingly coordinating attacks on IT supply chains as it only takes on strike to exfiltrate data from multiple departments and organizations.

Case Study: Cyberattack on Nova Scotia’s MOVEit System

In May of 2023, the Government of Nova Scotia was hit by the global attack on the MOVEit file transfer system. It’s estimated that personally identifiable information (PII) of more than 100,000 Nova Scotians was accessible through the breach, impacting:

• government employees
• teachers
• students
• healthcare patients
• pension plan recipients

Cyber threat 4: Municipal payables vulnerable to social engineering and financial fraud  

Business email compromise, which is when cybercriminals impersonate trusted contacts to divert payments, is of significant risk. One successful scam can quickly rob local governments of significant sums.

Case Study: City of Saskatoon, SK, loses $1 million in financial fraud

In August of 2019, the City of Saskatoon lost more than $1 million after falling for a fraudulent email. The cybercriminal, who claimed to be the CEO of a construction company the city dealt with regularly, successfully convinced the recipient to change the company’s banking information so funds were sent to a fraudulent account.

Cyber threat 5: Municipal resource constraints and old systems make for an easy target 

Municipalities often operate with small teams and legacy technology. This translates into slower integration of cybersecurity measures, which insurers require to provide coverage from escalating cyberattacks.

Case study: City of Hamilton, ON, ransomware claim denied

In February 2024, Hamilton experienced a ransomware attack, which disabled approximately 80% of the city’s network. This cyberattack impacted city services for several weeks, including:

• business licence processing
• property tax
• transit planning
• finance and procurement systems

While the city had cyber insurance, the claim was denied as the required multi-factor authentication protocols were not put in place. As a result, the city had to spend more than $18 million on response, system recovery and third-party support.

Municipal government cyber insurance checklist: 7 prerequisites for coverage

Insurers have always expected policyholders to share in some of the risk, which is why risk mitigation is a critical requirement for commercial insurance.

This holds true for obtaining cyber insurance for local governments. Underwriters expect municipalities to have specific cybersecurity measures in place.

At a minimum this includes:

The above list provides a high-level overview of the minimally required cyber controls that insurers now expect. Local government should work with an Acera Insurance advisor to determine their cyber insurance needs and to clearly understand and action the cybersecurity measures that insurers require in exchange for coverage.

How can local governments invest against cybercrime?

Municipal governments have what cybercriminals want: Interconnected networks, data, cashflow and old technology.

When it comes to protecting municipalities from escalating cyber risks, cyber insurance and cybersecurity go hand-in-hand.

Cyber insurance provides a safety net for when an attack may breach cyber controls.

And established cybersecurity helps to minimize the risk and is also required to obtain cyber insurance — and to get a claim paid, as evident from the City of Hamilton case study above.

One without the other leaves local governments vulnerable to a cyberattack.

As cybercrime continues to escalate and evolve, municipal financial leaders must prioritize investing in proven risk mitigation measures that can thwart breaches that cause financial, reputational and legal fallout.

FAQs: What municipal finance leaders need to know about cyber risk, required controls and insurability

Acera Insurance’s Daniel Tassoni answers three questions about cyber maturity for municipal financial leaders.

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Daniel Tassoni, Senior Client Executive and Municipal Team Lead, brings more than 12 years of insurance and risk management experience along with specialized expertise serving municipal governments. Connect with Daniel at [email protected]or 250.869.6082.

Related reading:

• Operational technology cyber risk facing Canadian businesses
• Adapting employee benefits for the millennial generation
• How wealthy Canadians can protect their reputation online

Information and services provided by Acera Insurance, Acera Benefits and any other tradename and/or subsidiary or affiliate of Acera Insurance Services Ltd. (“Acera”), should not be considered legal, tax, or financial advice. While we strive to provide accurate and up-to-date information, we recommend consulting a qualified financial planner, lawyer, accountant, tax advisor or other professional for advice specific to your situation. Tax, employment, pension, disability and investment laws and regulations vary by jurisdiction and are subject to change. Acera is not responsible for any decisions made based on the information provided.

Artificial intelligence (AI) is becoming increasingly embedded in hospitality operations, from chatbots and virtual concierges to mobile check-ins and automated pricing tools. The technology is driving efficiency, elevating guest experiences and helping ease labour pressures. But growing data volumes and systems integration also introduces new vulnerabilities for hotels, restaurants and other hospitality businesses. 

What risks should be considered when adopting AI and what steps can leaders take to proactively reduce their exposure? With nearly 15 years of insurance and risk management experience with specialized expertise in hospitality, Acera Insurance’s Steve Noreen shares how organizations can implement AI safely while protecting themselves along the way. 

Where is AI driving the biggest shifts in hospitality and what are the AI-driven risks?

AI’s presence in hospitality has moved beyond pilots and experiments. Businesses are leveraging these tools to navigate pressure points and unlock new efficiencies, supported by deliberate investment in weaving the technology into decision-making and service delivery. This rapid uptake is setting the stage for a variety of practical applications that are emerging as central drivers of modern hospitality operations. 

Guest-facing chatbots, AI concierges and voice assistants

Hotels are deploying AI to answer customer FAQs, support bookings, enable multilingual service and provide 24/7 responsiveness. Meanwhile, restaurants increasingly rely on automated drive-thru agents and chatbots for reservations and ordering. However, these systems often capture and retain voice or text interactions, triggering obligations around privacy disclosure, transparency and Canada’s Anti‑Spam Legislation (CASL) which requires consent, identification and easy unsubscribe options for any commercial electronic messages. And in jurisdictions like Quebec and B.C., the use of any biometric identifiers (e.g. fingerprints, facial and voice recognition, etc.) face even more stringent expectations, requiring express consent and formal evaluations before they can be used legally. 

“Guests often don’t realize they’re interacting with AI, making transparency essential to building and preserving trust in your brand.” – Steve Noreen 

Dynamic pricing and automated revenue management

Hotels traditionally rely on staff to manually adjust rates based on occupancy, competitor activity and seasonal patterns. Today, AI can analyze demand, trends and local events in seconds and automatically recommend rate changes or trigger targeted promotional offers through email and text messages to fill rooms. While this speed and precision can significantly enhance revenue performance, particularly during slow periods, these tools require careful oversight. Claims of “AI-optimized savings” and automated discounts must be accurate to avoid triggering deceptive marketing scrutiny and pricing algorithms must withstand audit so businesses can justify how rates were generated.

Frictionless hotel check-in and smart keys

Mobile keys, digital check-in and ID verification kiosks offer guests a smooth, contactless arrival experience – but also increase the stakes if a system is compromised. A breach could allow unauthorized room access, interrupt front-desk operations or expose stored identity information. These risks carry added weight in jurisdictions with strict privacy rules: Quebec’s Law 25 requires formal biometric notices and tight retention controls, while B.C.’s Personal Information Protection Act (PIPA) limits the use of biometric information even when images are publicly available. As these technologies become more common, hospitality businesses must ensure their deployment meets both security and compliance requirements. 

Back-of-house operations

Behind the scenes, AI is supporting many of the functions that keep hospitality businesses running smoothly that guests may never see. These tools are helping teams operate more efficiently, anticipate needs and maintain consistency in service within high-pressure, fast-paced settings. Today, AI is commonly used for: 

• Predictive maintenance for elevators, HVAC systems and refrigeration, helping prevent costly breakdowns. 
• Housekeeping scheduling that allocates staff resources based on occupancy patterns and turnaround requirements. 
• Menu engineering and food cost forecasting, enabling more informed decisions about pricing, profitability and preparation levels. 
• Food safety monitoring through kitchen cameras that detect glove use, cross contamination or temperature issues. 
• Fraud detection and anomaly tracking that flag unusual transactions or operational inconsistencies in real time. 

“Robotics and AI-powered automation boosts productivity, but they also create additional points of equipment failure that businesses must manage proactively to avoid prolonged disruption.” – Steve Noreen

5 ways to minimize AI risks in hospitality  

Safely adopting AI in hospitality means approaching it with strategy, structure and a commitment to privacy and compliance. Leaders must ensure that AI tools are implemented responsibly and supported by the right governance frameworks. Building responsible, privacy‑conscious and legally aligned AI practices helps protect both guests and business operations. Below are Steve’s top recommendations, supported by industry best practices and Canadian regulatory context. 

1. Conduct a privacy impact assessment (PIA) before launching any AI tool

A PIA identifies what data you collect, how it’s used, stored and shared, and whether it aligns with Canadian and international privacy standards. A thorough PIA evaluates alignment with Personal Information Protection and Electronic Documents Act (PIPEDA) federally and the applicable provincial legislation such as B.C.’s PIPA and Quebec’s Law 25. 

A PIA is especially critical when deploying AI tools that handle personal or biometric information, including: 

• Chatbots that collect guest preferences or conversation logs 
• Biometric or digital identity check-ins 
• Loyalty programs that use behavioural profiling 
• AI-driven marketing systems that generate personalized messages 

The EU’s General Data Protection Regulation (GDPR) is considered one of the world’s most comprehensive privacy frameworks – many jurisdictions model their laws after it. As a result, adopting GDPR‑level controls often positions hospitality businesses to meet and exceed requirements under local legislation. 

“If you’re implementing AI, a privacy impact assessment should be your first step. It lays the groundwork for transparency, compliance and consumer trust.” — Steve Noreen  

2. Strengthen CASL-compliant AI marketing practices 

AI-generated emails, SMS offers and automated outreach are subject to Canada’s Anti‑Spam Legislation (CASL). This means that even if content is drafted or delivered by AI, the organization sending out these messages are responsible for ensuring legal compliance. Under CASL, businesses must have: 

• Express or implied consent before sending any commercial electronic message 
• Proper identification of the sender and how to contact them 
• A simple, easy-to-use unsubscribe mechanism (commonly one click)
• Records showing when recipients opted in and opted out 

Additionally, AI must never automatically harvest emails or send promotions without documented permissions. Businesses are responsible for complying with consent, transparency and unsubscribe obligations, and improper use of AI can lead to significant penalties. 

3. Reinforce cybersecurity and prepare for outages

I systems depend heavily on cloud platforms, integrations with point‑of‑sale systems and constant connectivity. That means even a brief disruption to a booking engine, payment processor or mobile‑key system can immediately impact guest experience and revenue.  

To build cyber resilience and reduce the operational impact of outages, operators should: 

• Segment networks from Internet of Things (IoT) devices to limit lateral movement if a system is compromised. 
• Maintain strong authentication (MFA) and keep PCI DSS 4.0 controls active on all payment‑related systems. 
• Test backups and incident‑response processes to ensure systems can be restored quickly. 
• Verify contingent business interruption coverage to protect against outages originating from key third‑party providers such as booking platforms or payment processors. 

Additionally, it is important to be aware that business interruption stemming from cyber incidents is not covered under traditional property policies, because data is excluded from standard property wording. Instead, this exposure is addressed under a dedicated cyber liability policy, which provides coverage for system shutdowns, recovery costs and related lost income.  

4. Address AI risks in HR and surveillance

AI is increasingly influencing HR and workforce management in hospitality, from resume screening tools that filter out candidates to automated interview platforms that assess tone, word choice and facial cues. AI-enabled monitoring is also becoming more common in kitchen and bar areas, where cameras can track food safety practices, cash handling and staff movement to prevent employee theft or fraud. These types of tools can introduce several risks to the business: 

• Algorithmic discrimination leading to unfair hiring or scheduling based on biased data. 
• Privacy breaches (particularly when employee activity is recorded, analyzed and stored without explicit notice or protections). 
• Unsubstantiated performance decisions such as disciplinary actions based on AI scoring or pattern detection. 

Because these issues directly affect recruitment, workplace fairness and employee rights, they fall primarily under employment practices liability (EPL). EPL insurance helps protect businesses against claims tied to discrimination, wrongful termination and other employment‑related allegations. 

5. Review relevant insurance policies 

AI is accelerating decision‑making and data‑driven workflows, but it’s also expanding the scope of potential liabilities. Risks tied to cyberattacks, system outages, regulatory compliance and AI‑generated errors are becoming more complex and interdependent. Many of these exposures fall into grey areas between traditional coverage lines, making it more important than ever to assess your insurance programs through the lens of emerging AI-related risks to ensure you are aligned with the realities of AI‑driven operations.  

• Cyber liability covers the costs of responding to and recovering from data breaches and cyberattacks. Unless other specifically excluded, AI-related data loss is generally covered under this type of insurance. 

• Errors and omissions (E&O) liability (also known as professional liability) protects your business if a third party suffers a financial loss due to advice or professional services you provide. If your business doesn’t provide these services, issues arising from AI use such as incorrect pricing or booking errors are more commonly addressed under cyber liability or contractual liability provisions.

• Directors & officers (D&O) liability protects leadership in the event they are personally sued for allegations of wrongdoing in the course of their duties as directors and officers of the organization. This coverage could respond if board members or executives are accused of failing to exercise proper oversight over AI‑driven systems or policies. 

• Equipment breakdown insurance responds when machinery or technology fails due to sudden and accidental mechanical or electrical breakdown. Pure software or algorithmic failures may not be covered unless specifically endorsed. This type of coverage is increasingly relevant as kitchens, HVAC systems and guest technologies adopt embedded AI.  

Helping you navigate AI risks in your hospitality business 

The rapid rise of AI in hospitality underscores the need for thoughtful, structured risk management. Privacy regulations are tightening, cyber threats are becoming more sophisticated and automated decisions can carry real operational and legal consequences. By grounding adoption in strong privacy practices, CASL‑compliant outreach, resilient cybersecurity and thoughtful HR oversight, as well as ensuring insurance programs reflect emerging AI exposures, your business can stay ahead of emerging risks while delivering the seamless experiences guests expect. 

And while AI may be the headline here, rest assured there’s a real human behind this article who’s ready to help you navigate it all. Connect with me directly to review your AI-related exposures and build a coverage strategy that matches your technology roadmap. 

FAQs

Acera Insurance’s Steve Noreen answers four questions about mitigating AI risks in the hospitality industry. 

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Steve Noreen is a Senior Client Executive at Acera Insurance. Steve brings more than 13 years of insurance experience and specialized expertise in the hospitality and tourism industry. He works closely with destination marketing and hospitality industry associations nationwide, serving as a trusted advisor and resource to member organizations navigating complex insurance and risk management requirements. You can reach out to Steve at 250.519.2303 or [email protected].

Also by Steve Noreen:

Managing insurance and risks for your hospitality business in 2025 

Information and services provided by Acera Insurance, Acera Benefits and any other tradename and/or subsidiary or affiliate of Acera Insurance Services Ltd. (“Acera”), should not be considered legal, tax, or financial advice. While we strive to provide accurate and up-to-date information, we recommend consulting a qualified financial planner, lawyer, accountant, tax advisor or other professional for advice specific to your situation. Tax, employment, pension, disability and investment laws and regulations vary by jurisdiction and are subject to change. Acera is not responsible for any decisions made based on the information provided.

Think quick: Are you able to name the complete contents of your living room along with their cash value? Now imagine trying to do this with your entire home following a fire or a robbery. This is why it’s important to create and maintain a home inventory — so that you can be prepared in case disaster strikes.

Whether you are a homeowner or renter, a home inventory helps to simplify insurance claims and ensure your valuables are covered. Here are four steps to take when creating your home inventory:

1. Divide your home into sections

Take the time to thoroughly go through each room of your home and create a detailed list of its contents. Each item should include:

• Category (electronics, appliances, furniture, clothing, etc.)
• Brief description
• Serial numbers for appliances and electronics
• Receipts with purchase date and price
• Photos or videos of the room and items
• Group lower-value individual items together with their estimated value (e.g., workout clothing – $500, nonfiction books – $650, etc.)
• Appraisal or valuation documents for high-value items
• Any additional notes that are relevant to your insurer

2. Store your home inventory securely

Choose a method that works for you, whether its Excel, a home inventory app, or pen and paper. The key is to keep your inventory safe. You can do this by:

• Backing up digital files to the cloud or emailing them to yourself regularly
• Storing handwritten lists and paper receipts in a fireproof safe
• Keeping more than one copy in different secure locations

3. Understand your policy’s special limits

If you own expensive items such as bikes, handbags or jewellery — it’s a good idea to consider additional insurance coverages. Review the special limits in your policy to ensure you’re not underinsured. For example, if your policy only covers jewellery up to $10,000 and your collection is valued at $15,000, connect with your advisor to discuss updating your coverage.

4. Don’t forget to review and update your home inventory regularly

Every time you make a major purchase, you should add it in your home inventory with the details listed in step one. Aim to review your inventory at least once a year to ensure it’s up to date. Don’t forget to update your insurance policy as soon as possible if there are any significant changes.

Questions? Contact your Acera Insurance advisor

If you have questions about what is covered under your home insurance policy, contact your Acera Insurance advisor. They can provide insights into your current policy limits and make sure that you are properly covered in the event of a claim.

Contact us today!