Deposit Protection Insurance: DPI Unpacked

Deposit Protection Insurance: DPI Unpacked

By Peter Williams


Every year a significant amount of new home transactions are pre-sales. This is especially true in the multi-unit markets around our provinces’ urban centres. Pre-selling gives developers a level of revenue certainty, gives banks comfort that the product has committed buyers and from that, allows construction financing to flow once agreed-upon sales targets are achieved. Pre-selling a significant amount of the total units has become a standard practice in our market. 

Prior to 2005, all funds received as deposits for purchases of homes had to be held in trust until the project was completed and the unit was delivered to the new homeowner. Millions of dollars sat idly in trust accounts for years while projects came out of the ground and were eventually completed. 

What changed on January 1, 2005, were sweeping changes to the Real Estate and Development Marketing Act. The changes allowed developers to now use those pre-sale deposit funds to pay for direct project costs for the projects themselves. This was a landmark change and allowed all that hard-earned capital to be put to work building the project it was earmarked to buy. Not only did these changes make sense, but they were also embraced by the industry. 

Despite the obvious benefits to the developer, uptake on the product was slow at first. It took some time for all stakeholders to become familiar with and comfortable with this new form of project financing. There was a learning curve. Now we can say, deposit protection insurance (DPI) is mainstream; it is a box to be checked for most brokers arranging the capital stack for their developer clients. 

For the developer, the economic benefits are compelling. They will save the spread between the annual premium rate of the DPI and the costs of capital of the debt replaced by the deposits. The savings are significant and are there every year until project completion and the unit turned over to the homeowner. For the banks, the credit ratios are improved and some projects on the line may move forward with the improved financial metrics. 

To apply, it is recommended the developer use an experienced broker to assist in putting together the information. The information itself is fairly straightforward with most of it mirroring what the developer has already provided to the primary lender. This along with a questionnaire and construction lending agreement are generally what is required to move forward. The underwriting process of DPI follows a similar path to that of the other lender(s).

This includes reviewing the viability of the project from a financial perspective. Examining the overall budget and proforma’s, along with key credit metrics, are important in determining the financial wherewithal of a project. This is done in conjunction with reviewing the developers overall financial strength and project experience. 

The development team is an important factor when a project is reviewed for DPI. This includes: project lenders, general contractor, subtrades, architect, consultants (structural, geotechnical, building envelope, mechanical, electrical), lawyer, marketing firm, mortgage and insurance brokers. A strong development team assists in mitigating the challenges that arise on projects. This provide stakeholders with an increased level of confidence that solutions are found swiftly and implemented effectively.  

As with all forms of construction, issues can arise during the different stages of the building process. The construction approach to that risk is assessed at the outset. This includes the developer’s project experience and key staff if they’re self-performing. If an arm’s-length general contractor or construction manager is hired, the merits of the form of contract are considered (fixed price vs construction management). Subtrade risk is an important factor, as the quality of subtrades can have a substantial impact on a project and its schedule. Contract performance risk and subtrade payment risk can be further mitigated and managed through construction bonding. Performance and Labor & Material’s bonds are an important tool developers can utilize to manage construction risk and control major cost components. 

Your broker’s experience is important through the underwriting phase and ultimately in the Facility Agreement you ink with the DPI provider. Some of the key aspects of your facility are the security provided, the premium charged and the deposit release terms. The earlier funds are released, the sooner economic benefits are realized and for a longer period. Once terms are agreed upon and finalized, security is then drafted up in conjunction with the lenders in the capital stack. When the security is finalized funds can then flow into the project according to the agreed-upon release terms. 

The savings are substantial and the product has evolved into an important and mainstream component of development financing. It’s a competitive and dynamic market out there and your broker will guide you through the process and ensure you get the best deal.


The views expressed in this article are exclusively those of the author; they do not necessarily reflect the views of Trisura Guarantee Insurance Company, its affiliates or partners.

A Message from Trisura’s Chief Operating Officer

A Message from Trisura’s Chief Operating Officer

Hello friends,

Man in blazer standing in front of marble wall.With the first quarter of 2021 coming to a close, I wanted to take the time to thank you for your continued support and valued partnership. Last year came with unique challenges and we hope we succeeded in helping make your brokerage run smoothly through it all. At Trisura, we take pride in helping our brokers be successful. In 2020 we conducted an extensive broker survey to give us insight into how we could continue to improve your experience with us. We appreciate all of the feedback received, and are in the midst of reviewing the results. We appreciate the tremendous role and responsibility that the broker community has and are honoured to support your efforts and the efforts of the Insurance Brokers Association of Canada. With this is mind, Trisura is pleased to continue our support as a Full Partner of the Insurance Brokers Association of Canada’s Broker Identity Program.

We are optimistic that we will be able to get together again in person later this year, and until then, we will do everything we can to bring you service that remains a step above.


Richard Grant
Chief Operating Officer, Trisura Guarantee Insurance Company

Contractors in a Post-Pandemic World

Contractors in a Post-Pandemic World

By Sara Ametrano and Matt Baynton


Picture this: it’s March 6th, 2020. There is a contagious virus wreaking havoc overseas, but in Canada it’s business as usual. We’re going to work, meeting family and friends at restaurants and even travelling. Then, a couple weeks later, we too enter a lockdown, thinking in a few days or weeks, we’ll be back at the office or on the job site – we’re preparing for our return. Well, those days turned into weeks, and those weeks into months. And now, over a year later, we’ve adapted to a new normal of social distancing and remote work for many of us.

As cases have risen and fallen over the past year, construction projects have halted and resumed. These disruptions caused confusion and stress between owners and contractors, both concerned with the delay of work and increasing budgets. Contracts between project owners and contractors often include a notice of delay and a Force Majeure clause, but the verbiage and section inclusions can change from one contract to the next. It comes as no surprise that the many starts and stops and contractual ambiguities have had an impact on a contractor’s operations over the past year.

While the construction industry has faired better than most industries, it hasn’t been without its struggles. It is important for brokers to understand any struggles their clients may be having  so that they may help ensure that their clients are set up for success post-pandemic.

When your contractors are about to begin a new project or resume former operations, it would be a good idea to cover the following topics with them:

  • Have on-site social distancing or supply chain delays lead to increased costs and profit fade?
  • Are construction owners coming to the table with financial relief under their contracts?
  • Are they considering amending new contracts to address potential future lockdowns or delays?
  • Have they communicated their existing circumstances to their bank and is the bank supportive?
  • Have they been able to replenish their backlogs with profitable new contracts?

Brokers will play an important role to help contractors navigate through the balance of the pandemic and should start working with them now to ensure they are prepared to take advantage of any stimulus spending that may be part of the government’s economic recovery plan.

Bonus tip for contractors:

Communicate with advisors, such as construction lawyers. They will be able to provide advice on the best language to use in your notice of delay, as well as give guidance on how to approach a new project when the pandemic dust settles.

What Trisura can do:

As we do with our other products, Trisura can tailor the professional liability coverage to fit each specific class of professional that we insure. Trisura takes a unique approach to all claims and provides expertise and solutions so organizations and individuals can quickly return to their business.

What about federal support?

The Government of Canada recently announced its plan to achieve net-zero emissions by 2050. The Government is turning to the Canada Infrastructure Bank (CIB) to help reach the goal, requiring support in five main areas: public transit, green infrastructure, trade and transport, broadband and clean power. CIB has already taken steps toward the ambitious goal, announcing a plan to invest $10 billion over the next three years, which will support economic growth and create new jobs in many sectors, including construction.

Looking for more information? Contact your Trisura surety representative today! Contact us.


The views expressed in this article are exclusively those of the author;  they do not necessarily reflect the views of Trisura Guarantee Insurance Company, its affiliates or partners.

Learn from the Best at Trisura through our Exclusive Education Series

Learn from the Best at Trisura through our Exclusive Education Series

By Sara Ametrano


The pandemic has prevented us from meeting with our broker partners in person, and we’ve really missed that interaction. It made it clear that now is the perfect time to try something new. So we’re seizing the opportunity to get creative, because after all, at Trisura, we love innovation.

You’ve participated in our e-learning courses (more coming your way this year!) and possibly even some in-person webinars with our subject matter experts. But now, we’re stepping things up even more, expanding our catalogue of courses with free webinars!

Hosted by an exclusive Trisura team, our education series will be a new way to learn about specialty insurance and surety. A fun way to learn at a distance, our instructors will present interactive courses live and will be ready to take any questions you might have. And that’s not all: continuing education credits will also be available to those who attend!

We’re looking forward to bringing exciting new courses your way and hope to see you at the webinars.

Stay tuned for more information including course information and accessibility and dates coming your way soon!

Championing Women Every Day

Championing Women Every Day

By Sara Ametrano


The theme of this year’s International Women’s Day is Choose to Challenge. We are seeing strides in the workforce; we are more diverse than ever, but we must continue to challenge and shape the future.

Trisura’s staff is 52% women strong, with several being influential members of Trisura’s leadership team. Women are difference-makers, and we stand by their personal and professional growth, as well as support their important initiatives.

We all know that the pandemic has posed unique challenges, including forcing companies and individuals to adapt to a new business landscape. Our team acted quickly towards navigating operations remotely and were there to assist our broker partners with any concerns they had. In fact, one of our very own underwriters, Emily Thompson, was the recipient of the 2020 Underwriter of the Year award from Insurance Business Canada, a reflection of her efforts to quickly streamline business and find solutions during the pandemic.

One of the people behind the faces of Trisura is our senior vice-president of Human Resources, Cindy Grant. Cindy works to ensure every element of the organization is a step above, from bringing top talent on board to managing Trisura’s philanthropic initiatives. An accomplished individual with a colourful career in the financial services sector, Cindy is an inspirational leader and her door is always open to everyone, whether it’s a work-related matter or simply to catch up.

“I am passionate about celebrating women in business and building inclusive workplaces where women thrive,” Cindy says. “Choose to challenge yourself–to learn, to grow, to teach.”

Women are an integral part of the workforce, and we honour them today and continue to be inspired by their drive and dedication.

Happy International Women’s Day!