Emerging Risks in 2025: What Canadian High-Net-Worth Individuals Need to Know

In 2025, the landscape of risk is shifting rapidly for affluent Canadians. While traditional concerns like market volatility and inflation remain relevant, new and increasingly complex challenges are rising to the forefront. Climate change, cybersecurity, and liability risks are evolving into critical threats for high-net-worth individuals (HNWIs) across Canada. These risks demand a proactive, tailored approach to wealth protection - one that includes innovative strategies and comprehensive insurance solutions.

Climate Change: A Growing Risk for Canadian Homes and Assets

Canada’s climate is changing, and its impacts are impossible to ignore. From wildfires in British Columbia to floods in Quebec and Atlantic Canada, extreme weather events are becoming more frequent and severe. According to the 2024 Chubb Wealth Report, 90% of HNWIs are concerned about climate change, with more than half expressing considerable worry.

For Canadian HNWIs, the risks are both personal and financial. Coastal properties face threats from rising sea levels, while inland homes may struggle with floods, snowstorms, and extreme heat. Despite these growing challenges, many homeowners remain underinsured. Flood coverage, for example, is often excluded from standard home insurance policies, leaving many properties vulnerable.

Summit Private Client Advice: Canadian HNWIs can mitigate climate risks by:

• Enhancing Home Resilience: Incorporate sustainable materials and technologies like impact-resistant windows, flood barriers, and fire-resistant roofing. Work with insurers to identify mitigation strategies and access discounts on premiums for these investments.
• Adding Specialized Coverage: Ensure policies include flood insurance, sewer backup coverage, and wildfire protection, even for homes outside traditionally high-risk zones.
• Insuring Multiple Properties: For those with secondary residences or vacation homes, ensure that all properties are covered under a comprehensive policy tailored to regional risks.

Cybersecurity: Protecting Digital Wealth in an Increasingly Sophisticated Threat Landscape

Canadian HNWIs are prime targets for cybercriminals. As the Chubb Wealth Report notes, 1 in 6 individuals with over $25 million in assets has had a family member victimized by cybercrime, with attacks ranging from phishing schemes to ransomware costing up to $150,000 per incident. With the rise of artificial intelligence, cyber threats have become more sophisticated, and affluent individuals often face unique risks due to their digital exposure.

Cybercrime goes beyond financial loss. Identity theft, social engineering scams, and even cyberbullying can deeply impact a family’s well-being. Canadian HNWIs who employ personal staff or rely on family offices face additional vulnerabilities, as these networks may not always have sufficient cybersecurity protocols.

Summit Private Client Advice: To address cybersecurity risks, Canadian HNWIs should:

• Invest in Cyber Insurance: Purchase dedicated cyber insurance policies that cover losses from phishing, ransomware, and fraud. These policies often include coverage for legal fees, identity restoration, and even public relations efforts.
• Implement Security Audits: Work with insurers that provide cyber risk assessments to identify vulnerabilities in home networks, connected devices, and digital habits.
• Extend Coverage to Family Members: Ensure that cyber insurance policies include protection for dependents and staff who may have access to financial accounts or sensitive information.

Liability Risks: Why Wealth Attracts Legal Challenges

Affluent Canadians are increasingly concerned about liability risks, with 92% of respondents to the Chubb survey citing anxiety about potential lawsuits. Despite this, only 28% carry excess liability insurance. In Canada, liability risks are rising as courts award higher damages in personal injury and defamation cases, and wealthy individuals are often viewed as deep-pocketed defendants.

Liability issues can arise from various scenarios, such as hosting large social events, lending high-value items like vehicles or boats, or employing household staff. Without adequate protection, these incidents can result in substantial financial losses and reputational damage.

Summit Private Client Advice: Canadian HNWIs can reduce liability risks by:

• Obtaining Umbrella Insurance: Extend coverage beyond standard home and auto insurance policies to protect against significant liability claims.
• Reviewing Permissive Use Policies: Work with an insurance advisor to establish clear guidelines on who can access your vehicles, properties, or other assets.
• Adding Employment Practices Liability Coverage: For those with household staff, this coverage can protect against claims related to wrongful termination, discrimination, or harassment.

Building a Proactive Risk Management Strategy

The rapidly evolving risk landscape in Canada calls for a more comprehensive approach to wealth protection. Insurance is no longer just a financial tool - it’s a critical part of safeguarding your lifestyle, legacy, and family. By combining proactive measures with specialized insurance products, Canadian HNWIs can mitigate risks effectively.

Partnering with Insurance Experts for Tailored Protection

One of the key findings from the Chubb report is that 60% of HNWIs trust their insurer to provide advice on emerging risks, such as climate resilience and cybersecurity. Working with an advisor who understands the unique needs of Canadian HNWIs is essential.

The Summit Private Client Division can offer tailored solutions, such as:

• Consolidating multiple policies under a single provider for seamless management and broader coverage.
• Providing consultations on advanced risk mitigation strategies, such as smart home technologies and disaster preparedness plans.
• Helping to navigate complex claims processes, ensuring faster resolution and greater peace of mind.

The Time to Act is Now

The threats facing Canadian HNWIs in 2025 are diverse and complex, but they also present an opportunity for forward-thinking individuals to strengthen their resilience. By addressing emerging risks like climate change, cybersecurity, and liability with tailored insurance strategies, affluent Canadians can protect their wealth, lifestyle, and legacy for generations to come.

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