As Canada’s health and wellness market continues to diversify, insurers are seeing both opportunity and complexity when it comes to protecting products like nutraceuticals, supplements, and microdose wellness items. Amid shifting regulations, new technologies, and supply chain pressures, underwriters are watching this space closely – and preparing for more claims.
According to Evan Pollock (pictured left), lead underwriter for product recall at Beazley, nutraceuticals represent “a real opportunity” for the insurance industry in Canada. Beazley is actively evaluating risks in this segment, both on the product recall and healthcare sides of the business, he told Insurance Business.
But opportunity comes with caution – particularly when it comes to the more experimental or less-regulated corners of the wellness sector. Beazley draws a clear line when it comes to microdose products. “If it’s not federally legalized, we’re not going to look at writing it,” Pollock said.
The divide between what is considered a natural health product and what is considered medication is a key regulatory tension. If companies don’t follow the appropriate standards, Pollock noted, products may need to be pulled from the market, opening the door to recalls or liability exposures. “There is a large gray area for nutraceuticals,” he said, adding that the origin of ingredients and supply chain quality are significant risk factors.
This grey area stems in part from overlapping regulatory frameworks. In Canada, many wellness products fall under Health Canada’s Natural Health Products (NHP) Regulations, while others (particularly those with therapeutic claims) may be treated more like pharmaceuticals, triggering stricter compliance obligations.
This ambiguity creates challenges not just for underwriters, but also for businesses that may not fully understand where their product falls on the regulatory spectrum, he said. That uncertainty is only growing as new wellness formats – including microdose-inspired offerings – gain traction with consumers.
While some wellness products can be covered under standard clinical liability policies, Pollock explained that more complex risks now require more specialized insurance solutions.
“We are seeing a tendency where business was lost in the last 4–5 years and there is mounting pressure on suppliers – corners are being cut and quality is being affected,” he said. “People are turning to cheaper suppliers and there are less controls throughout the supply chain.”
Dana Choudry (pictured right), underwriter for miscellaneous medical and life sciences at Beazley, echoed that concern and pointed to labeling as one of the biggest exposures facing nutraceutical brands. As generative AI becomes more common in label creation, there’s an added layer of risk around accuracy and compliance.
“Making sure the label is right for who the product is suited for and making sure it’s up to par” is critical, Choudry said. She noted that Beazley’s recent Tech Transformation & Cyber Risks report found that 67 percent of Canadian business leaders expect AI will replace jobs in their companies over the next 18 months, suggesting that reliance on automation will only increase.
As small and mid-sized companies look to streamline operations, some are adopting AI-driven tools without fully vetting their outputs. Inaccurate dosage, misleading health claims, or non-compliant phrasing can all raise the risk of regulatory enforcement and recall.
Even when ingredients aren’t illegal, Beazley’s experts say that they may still fall into categories that are excluded by many product liability policies. “There is an extensive list of excluded ingredients, and there are health products that may not be illegal but still hard to get coverage for,” Choudry said.
Despite these challenges, both underwriters see a growing need for tailored insurance solutions in this sector – especially as claims and inquiries related to recalls are trending upward.
“We will continue to see an uptick,” Pollock said, citing factors such as geopolitical volatility and the introduction of new technologies that add layers of complexity to manufacturing, labeling, and sourcing. In response, insurers are evolving their offerings – not just to cover losses, but to help clients proactively build resilience.
Pollock emphasized the importance of insurance products that include crisis consulting services, access to experts across product classes, and guidance on quality control practices. These kinds of wraparound solutions, he said, “will really add value in this era of complex risk.”
