British Columbia’s development pipeline is under pressure. Interest rates, labour constraints and shifting buyer demand dominate headlines. But behind the scenes, another factor is shaping outcomes just as significantly: insurance capacity.
In 2026, financing, construction timelines and insurance are no longer separate conversations. They move together, and the projects that recognize this early are the ones most likely to maintain momentum.
A Changing Risk Environment
Greater Vancouver presents a uniquely complex underwriting environment. Seismic exposure, dense project values and insurer accumulation limits make capacity deployment more cautious. With earthquakes common in B.C., and their ability to cause cascading impacts such as liquefaction, fires and infrastructure disruption, the built environment carries a higher risk profile than many other regions in Canada.
At the same time, the total cost of risk has risen. Canada’s catastrophe losses continue to influence insurer appetite and terms. CatIQ’s early 2026 reporting notes 2025 insured catastrophe losses of CAD $2.4B and underscores that catastrophe frequency remains high even in “lower” loss years compared to record-breaking periods. The Insurance Bureau of Canada has also highlighted how extreme weather losses have become a persistent affordability and availability issue for the market.
Uncertainty itself has also become a risk factor. Geopolitical pressures, trade policy shifts, material lead times and equipment availability make construction timelines harder to defend. Meanwhile, condo presales are softer than in previous cycles, and some projects are not transitioning cleanly from planning to construction.
In response, more developers are leaning into purpose-built rental as for-sale economics tighten. That shift changes both the risk profile and the operational mindset. Developers are increasingly building assets they intend to hold and operate, and insurance must evolve accordingly.
Why Insurance Now Influences Financing
Insurance has become a structural input that influences whether a lender will advance funds, questions if the contractual risk allocation is financeable, and decides if a schedule is credible.
Public and private lenders are also taking a deeper look than before. Many now hire third-party consultants and scrutinize coverage terms more closely. Some are willing to revisit insurance requirements, but only when supported by strong rationale and defensible risk controls. Within the CMHC ecosystem as well, we’re seeing clearer policy direction and more emphasis on construction risk documentation and mitigation.
Projects stall most often at the intersection of viability and proof: when pro formas are strained and the insurance submission cannot clearly demonstrate disciplined execution.
Common Misconceptions About Underwriting Construction Risk
A common misunderstanding among developers is thinking that the insurance decision is primarily about the premium. Premium matters, but underwriters are really evaluating risk clarity. They want to know the answers to these questions: Who holds what risk contractually? How is the project phased, and what is the real exposure at each stage? What technology and controls are in place to prevent high-frequency losses (especially water damage)? How will delays be managed and communicated?
When brokers are brought in too late, there is less room to structure risk effectively, particularly on contractual risk allocation and lender-driven insurance conditions that can be negotiated with evidence and context. Engaging early is often the difference between flexibility and friction.
Lessons from a Major Burnaby Development
A recent large, multi-phase development in Burnaby illustrates the pressures the market is facing.
Positioned beside rapid transit and planned as a high-density, mixed-use community, the project required complex insurance structuring for several reasons.
One, it sits in a high earthquake-exposure region where insurers are mindful of geographic accumulation. It also includes significant underground work and multiple towers built over shared infrastructure, creating concentrated values at key construction stages. And it required the insurance program to adapt to scope changes and schedule realities.
The solution was to structure coverage around actual phased exposure, aligning declared values and limits to what was truly at risk at each stage, rather than insuring the entire completed project from day one. This approach helped insurers deploy capacity progressively and gave lenders greater confidence that coverage would remain responsive as the project evolved.
Across B.C., and increasingly across the country, projects that are moving forward tend to share several traits: They quantify and communicate risk early. Values-at-risk analysis, NatCat and seismic considerations are addressed upfront, making underwriting more predictable. They adopt technology that prevents losses, not just documents them. Water mitigation sensors reduce claims and increase insurer confidence because they demonstrate proactive management. And they treat risk advisors as part of the project team. Early engagement reduces late-stage surprises that jeopardize timelines and financing.
Despite ongoing friction in the real estate market, insurance capacity exists. The market can support development, especially where risk is well-managed.
The Bottom Line
Insurance is actively shaping B.C.’s development future by forcing early conversations around risk structure, resilience and execution quality. Financing, timing and insurance capacity are now one conversation. Projects that start that discussion early are better positioned to maintain momentum and deliver the housing and infrastructure outcomes the province needs.
Sarah Hanson is senior vice president and B.C. and Alberta regional leader for Property and Casualty at NFP, an Aon company. She can be reached at [email protected].
Hamza Jamal is vice president and account executive for Property and Casualty at NFP, an Aon company. He can be reached at [email protected].
