Across the Canadian public sector, one of the most persistent challenges is that risk management continues to be treated as an insurance task rather than the strategic discipline that should guide the entire organization. Insurance should align to your risk strategy, not dictate it.
Why Risk Management Comes First
Strong risk management starts well before renewal. It means clear risk identification, proper documentation, consistent application of controls, and ongoing measurement against frameworks like ISO 31000 and CSA standards. It also requires accurate Statements of Values (SOVs), reliable Construction, Occupancy, Protection and Exposure (COPE) data, up-to-date asset schedules, and proper integration of incident and claims information through a Risk Management Information System (RMIS) or internal reporting system. That is the real foundation of a stable and sustainable insurance program.
The Current Gap
In many municipalities, health organizations, school divisions, and other public bodies, risk and insurance functions often sit within accounting or finance portfolios. This naturally shifts the focus towards premiums and budget impacts, rather than exposure analysis, loss control recommendations, engineering reports, deductibles, retention strategies, or long-term risk treatment plans.
The Impact of a Financial Lens
When insurance is viewed primarily as a financial function, insurance renewals become reactive. Brokers and insurers must navigate incomplete SOVs, outdated valuations, inconsistent loss data, and unclear risk ownership. In a market where insurance carriers are selective, this introduces volatility, erodes negotiating power and places unnecessary pressure on premiums.
What Happens When Risk Management Leads
Shifting the focus from finance to operational exposure changes everything. Spending becomes targeted, real-time exposure are covered and insurance premium is aligned with risk, often resulting in overall cost savings. Insurance becomes one tool in the risk management shed, not the entire toolbox. Risk transfer is important, but so is control, mitigation, and avoidance. A proactive risk manager engages early in contract phases, influences insurance requirements internally, and works with boards and management to define and refine organizational exposure.
Public entities frequently rely on third-party contract language to dictate insurance requirements, which can lead to unfair risk allocation and an incomplete understanding of their contractual obligations. Rather than defaulting to external contracts or outdated templates, organizations should take a proactive approach by conducting internal risk reviews, negotiating unfavorable indemnity and insurance clauses out of agreements, and adopt legally vetted and modern internal contract templates. These steps establish a strong foundation for prudent risk transfer.
A well-structured risk program goes beyond simply purchasing insurance. It embeds controls and mitigation strategies directly into contracts, reducing exposure and managing losses without immediately involving insurers. This proactive approach is cost-effective, strengthens internal risk management and compliance, and reduces reliance on risk transfer. It also provides organizations with the time and clarity needed to assess the financial impact of an event and determine whether pursuing recovery beyond the deductible is worth the long-term cost of a claim.
The Payoff
When organizations place risk management at the centre and treat insurance as the financial backstop, the results are transformative. Loss control recommendations get actioned. Engineering surveys influence maintenance and capital planning. Claims reviews highlight operational gaps that can be fixed. Departments understand their risk responsibilities. Insurers see a credible, well-managed organization worth partnering with.
The benefits are clear: better terms and conditions, more predictable premium cycles, lower total cost of risk, fewer operational disruptions, and improved resilience. Insurance becomes what it was meant to be, the final layer of protection after strategic risk treatment, not the first tool reached for.
For public entities in Canada, this shift is one of the most meaningful ways to strengthen operations and deliver long-term value to communities and taxpayers. When risk management leads, insurance follows in a much stronger position.
Let’s Work Together
If your organization is ready to strengthen its risk posture, improve insurance outcomes, or build a more strategic and defensible approach to risk management, Axis Insurance’s Public Sector group is here to help. Our team combines deep sector expertise with practical, data-driven insights to support municipalities, health organizations, educational institutions, and other public bodies across Canada.
Connect with us today to discuss how a proactive risk-first strategy can transform your insurance program and reduce your total cost of risk.
Learn more about insurance for the Public Sector today.
Share post:
Barrie Latter
Lead Consultant, Sales, Public Sector+
I’m Barrie Latter, Lead Consultant for Public Sector + at Axis Insurance. I bring over 15 years of insurance and risk management experience, with a career focused on supporting municipalities and public sector organizations across Canada. In my role, I help clients strengthen their resilience by designing strategic insurance programs that reflect their operational needs and long-term goals.
Learn more
