Canadian professional services firms are quietly reshaping how they approach the United States as uncertainty around the Canada-United States-Mexico Agreement (CUSMA) encourages some to avoid the market altogether while others deepen their presence and adjust their insurance programs, according to a professional risk specialist.
Alex Ilkos (pictured), a client executive in the professional services unit at Purves Redmond Limited, said CUSMA negotiations are not directly changing errors and omissions (E&O) coverage for professions such as engineers, lawyers and architects. But they are influencing where firms choose to operate and how they structure insurance for cross‑border work.
“In my world, there are implications of the US‑Canada portion, but it’s maybe a little less so specific to the tax or tariff side,” he said. “Professional services themselves aren’t really tariffable – they’re not importing or exporting anything – but there are still adjustments happening around the edges.”
Ilkos said his practice is focused on “professional services” – lawyers, engineers, accountants, architects and similar firms whose product is advice rather than physical goods. For those clients, CUSMA‑related uncertainty tends to show up in strategic choices about whether to pursue work in the US and how to present themselves to major counterparties.
“In all honesty, I think the only thing that I have a commentary to that, just because of the world that I work in, is either actively avoiding the US or finding ways to make it easier to do business there,” he said.
On one side, some large Canadian clients have decided not to cross the border despite potential opportunities, he noted.
“We have some large clients that have made the decision that they’re not going to go into the US,” he said. “They probably could, they have opportunities to, but they’ve decided, ‘I don’t want to open that can of worms, so let’s keep everything here.’”
That choice can simplify their risk profile and reduce the need for complex cross‑border insurance arrangements, even if it means forgoing growth in the US, he said.
On the other side, Ilkos is seeing firms lean into the US market by establishing a more formal presence and seeking “admitted” insurance policies south of the border, even where a single Canadian‑based policy might technically cover the work.
“We’ve seen some clients who might be Canadian‑based and instead of just having a P.O. box in the US that they use to sign contracts with, we’ve had a few clients open up US offices and have an actual office front to avoid any of the political issues over the border,” he said.
That shift is partly about perception and partly about practical considerations for their own customers, he added. Large end‑clients with significant exposure to tariffs and cross‑border supply chains may prefer to hire advisers that look and feel local, even when the underlying services could be delivered from Canada.
“If you’re dealing with Walmart, let’s say, as a client and they want to hire an engineer, it’s a Canadian engineer,” he said. “Walmart’s always thinking about tariffs, I’m sure… so they go, ‘Okay, well this engineer has a US office, it’s easier to continue to hire us.’”
A similar logic can apply in the other direction for Canadian projects, he noted. A retailer building a new location in Canada may find it simpler to work with Canadian‑based service providers, particularly when trade and political issues at the border are front of mind.
On the insurance side, Ilkos said those operational choices are feeding into greater interest in locally admitted policies for professional lines, a structure that has traditionally been more common in general liability and workers’ compensation.
“If your business is in Canada but you have an office in the US, you can get an admitted policy for that location,” he said. “It’s mainly for tax implications, and you have a dedicated limit for there… if your US office does work, you have licensed paper in the US that will pay out.”
Historically, many professional firms have bought a single-parent E&O policy in Canada with worldwide coverage, with any US claims ultimately paid from that policy, he said. That remains an option, but he is seeing more clients opt for locally admitted arrangements to reduce friction if a claim arises or funds need to be moved across the border.
Ilkos stressed that the relationship between CUSMA and these shifts is indirect. The agreement does not impose new conditions on how professional liability policies are worded or sold, and most of his clients are not directly subject to tariffs.
“Your accountants, your lawyers, your engineers – they’re typically licensed in their jurisdiction,” he said. “Most Ontario‑based lawyers, they practice Ontario‑based law… they don’t have direct exposure to tariffs. They’re not purchasing anything. They’re not importing anything. They’re not exporting anything.”
However, he said the broader trade and political environment influences the expectations and risk appetites of their clients, particularly large corporations with complex supply chains and significant US exposure. That, in turn, nudges professional firms to reconsider footprint and insurance structure even in the absence of a formal requirement.
“I think businesses in each individual country are going to want to do business with their country,” he said. “People want to hire from within their country to avoid potential issues there and support locally.”
