Epithelia act as a barrier against environmental stress and abrasion and in vivo they are continuously exposed to environments of various mechanical properties. The impact of this environment on epithelial integrity remains elusive. By culturing epithelial cells on 2D hydrogels, we observe a loss of epithelial monolayer integrity through spontaneous hole formation when grown on soft substrates. Substrate stiffness triggers an unanticipated mechanical switch of epithelial monolayers from tensile on soft to compressive on stiff substrates. Through active nematic modelling, we find unique patterns of cell shape texture called nematic topological defects that underpin large isotropic stress fluctuations at certain locations thereby triggering mechanical failure of the monolayer and hole opening. Our results show that substrate stiffness provides feedback on monolayer mechanical state and that topological defects can trigger stochastic mechanical failure, with potential application towards a mechanistic understanding of compromised epithelial integrity in bacterial infection, tumor progression and morphogenesis.