How Canada’s commercial liability market is shifting

Canada’s commercial liability market has shifted decisively in favour of buyers in 2026, according to Aon’s Spring 2026 Canadian Insurance Market Update.

“After several years of constrained capacity and firm pricing, insurers are now competing actively for quality accounts, particularly in primary casualty,” the report says. “New entrants and established markets are broadening appetite, stepping up line sizes, and sharpening terms.”

Clients with strong risk profiles are seeing more choice and competitive pricing, Aon says. These clients are also seeing opportunities to enhance wording, expand coverage, and optimize program structure to align with current operations and contractual risk transfer.

The shifting commercial liability market is particularly visible in excess casualty, Aon says.

“Competition for participation on towers that were previously difficult to build is driving meaningful rate reductions and, in many cases, broader coverage for many industries,” the report says. “Capacity is generally accessible, but insurers remain mindful of aggregation and jurisdictional risk, often preferring smaller layers than were typical before the hard market.”

Accounts with heavy U.S. exposure, challenging loss experience or higher-hazard profiles are seeing more measured improvement, Aon says, highlighting the importance of targeted risk improvement, credible data, and clear risk narratives.

For many buyers, this landscape supports a fresh look at limit strategy and structure, including reassessing adequacy in light of social inflation and verdict severity, rebuilding or smoothing towers, and calibrating retentions to balance volatility with balance sheet strength. In many cases, a portion of savings can be redeployed into additional limits, better layering, or expanded protection.

That said, several structural challenges persist, despite broader softening.

U.S. jurisdictional risk remains a central concern, with social inflation (such as nuclear verdicts, or those exceeding $10 million) and litigation funding “sustaining elevated severity expectations,” Aon says. In addition, higher hazard classes, complex product manufacturers, and large fleet or transportation risks continue to attract close underwriting scrutiny and more cautious capacity deployment.

Coverage terms are generally stable and even “improving at the margins” in some cases, Aon reports.

Exclusions for per-and-fluoroalkyl substances (PFAS, also known as ‘forever chemicals’) and other emerging contaminants, wildfire, and specific geopolitical exposures remain commonplace, the brokerage says. But underwriters in 2026 are more open to tailoring language for well-controlled risks. And clients that can show strong governance, mature safety culture, and disciplined loss control are best positioned to negotiate refinements and, where appropriate, limited carve-backs.

Underwriting discipline has evolved rather than disappeared, Aon says. “Carriers are still selective, but the stance is more solution oriented, with a greater willingness to differentiate between risks and to adjust pricing, structure, and wording when presented with comprehensive, data rich submissions, clear risk narratives, and credible improvement plans.”

From Cracked Engines to Critters: Common Boat Claims and Avoidable Oversights Image

Insights Paid Content

From Cracked Engines to Critters: Common Boat Claims and Avoidable Oversights

Aviva’s Marine Assessment Unit shares real world boat claims, coverage surprises, and practical insights brokers can use to better protect NauticLife customers.

By 

Sponsor Image

Liability underwriters continue to track a widening set of emerging exposures, including ongoing social inflation, changing litigation trends, environmental, social and governance related scrutiny, cyber and technology driven risks, and environmental liabilities.

2026 is a constructive time for organizations to reassess the design and performance of their casualty programs, Aon says. Priorities include improving exposure data (such as fleet, driver, and contractual information), strengthening safety and claims management practices, reviewing limit structures in light of verdict trends, and fine-tuning retentions and attachment points to reflect true volatility appetite.

Buyers that take a more strategic, data-driven approach in this phase of the cycle will be better positioned to navigate future shifts in capacity, pricing, and liability risk.

As one measure of underwriting profitability, the Canadian commercial liability market ended 2025 with a Net Insurance Service Ratio of 81%, Aon’s report says.

Jason Contant

Jason has been an award-winning journalist with Canadian Underwriter for more than a decade, including the past three years as associate editor and, before that, as digital editor for seven years.