The sharpest divergence in North American construction insurance is not at the pricing level – it is at the coverage level, and it is widening. US insurers have replaced London Engineering Group 3 clauses with proprietary wordings carrying stricter defect definitions, higher deductibles and embedded sublimits that reduce recovery on contractor-caused losses. In Canada, LEG3 coverage remains the standard, though legal disputes over the distinction between damage and defect have confined the market to the 1996 form rather than the updated 2006 version. For brokers advising on cross-border or large-scale construction programs, the gap between what a US and a Canadian placement delivers at the coverage level is now a material program design consideration, not a technical footnote.
US and Canadian construction insurance are moving apart at the coverage level
