Having clear policy wording is one component of the ‘social’ part of environmental-social-governance (ESG) practices, suggests senior official with Canada’s financial services regulator.

‘It’s increasingly clear that insurers need to focus on policy wording to avoid adverse court decisions as the social aspects are more in favour of claimants,’ said Neville Henderson, assistant superintendent at the federal Office of the Superintendent of Financial Institutions (OSFI)’s insurance supervision sector.

During a virtual fireside chat, Henderson was asked by Chris Cornell, partner and national sector leader for insurance at KPMG Canada, what role insurers need to play in the social element of ESG.

Henderson said many disputed business interruption claims – both from cyber events and the COVID-19 pandemic – are working their way through courts both in North America and elsewhere.

Policies that are silent – on whether BI is covered for pandemic or a cyber event ‘are very vulnerable to an adverse [court] decision,’ Henderson said during KPMG Canada’s 30th annual insurance issues conference.