When Donald Trump starts musing about tariffs, Canadians—and their insurance claims adjusters—take note. The proposal for a 25% tariff on imports might sound like the opening line in a political poker game, but the implications for Canadian businesses (and by extension, the insurance claims landscape) could be anything but bluff.

As a Canadian claims company, we’re less concerned with the political drama and more focused on the tangible fallout: how all this might affect risk, claims patterns, and exposure to fraud. Below, we take a closer look at how Trump’s tariff threats could impact Canadian claims, along with strategies that can help us weather the uncertainty—maple syrup in hand.

Claims implications of potential U.S. tariffs

Moral hazard and fraud risks from business disruptions

If tariffs drive up costs for cross-border trade or push U.S.-focused investment out of Canada, some businesses will inevitably face financial distress. Economic strain can heighten the risk of moral hazard—where struggling companies exploit their insurance coverage.

  • Fraudulent claims: financially strapped businesses may inflate losses, file exaggerated claims, or even stage incidents to recoup funds.
  • Bankruptcies and unresolved claims: a wave of closures could leave insurers with abandoned claims, legal disputes, and drawn-out liability issues.

Increased costs in cross-border claims

Tariffs would raise the cost of Canadian goods for the U.S., resulting in end products with a higher freight value. We expect this to directly impact cross-border claims.

  • Higher freight costs: replacing damaged goods and sourcing from abroad could become pricier, inflating claims values.
  • Delays in delivery: supply-chain bottlenecks may cause shipment delays; adjusters will need to separate legitimate delays from avoidable disruptions.

Warehouse congestion and stockpile risks

Anticipating only short-term tariffs, some businesses may stockpile inventory, creating unusually high inventory levels that affect claims.

  • Higher insurable values: larger inventories drive up total value at risk, so claims for theft, fire, or water damage could be substantially more expensive.
  • Loss-adjusting complexities: adjusters may have to untangle whether a claim involves temporary excess inventory or inflated valuations.

Political posturing and Canadian election pressures

Canadians have dealt with tough tariff talk before, but this round comes as the country nears a federal election. Every politician, from local mayors to the Prime Minister, wants to appear unflappable in the face of Trump’s threats. Bold statements abound, yet many are skeptical that current leadership can deliver meaningful pushback if a 25% tariff drops.

Despite the possibility that a 25% tariff is more bravado than imminent reality, the insurance sector should be prepared for certain impacts. The best strategy is to remain vigilant—especially regarding moral hazard, supply-chain disruptions, and the potential for higher claims costs.

Strategic playbook: strengthening Canadian businesses against uncertainty

While business owners can diversify or pivot to mitigate potential tariff hits, claims providers operate in the post-event world, navigating the aftermath. A few steps the claims industry can take:

  • Support Canadian infrastructure through vendor partnerships—prioritize local suppliers, invest in Canadian talent, and strengthen supply-chain relationships.
  • Prepare for post-tariff claims patterns—enhance fraud detection, build expertise in high-value inventory claims, and anticipate cross-border delays.
  • Monitor and adapt to economic trends—stay agile in underwriting partnerships and provide data-driven insights.
  • Engage the Canadian business community—foster vendor resilience and encourage national collaboration.

Navigating uncertainty with confidence

Trump’s tariff threats may bring a sense of déjà vu to Canadian businesses, but the stakes—and potential claims fallout—are real. The silver lining? Canada has options. By investing locally, supporting businesses, and staying proactive, we can manage—and even mitigate—much of the potential upheaval. In the meantime, let’s keep calm, process those claims, and carry on.