What is life sciences products liability insurance coverage?
Every industry faces some level of liability risk. That’s why every appliance manual starts with page after page of safety warnings and why every other billboard seems to advertise a personal-injury attorney.
Life sciences companies face unique challenges. Their products interact closely with the human body and can lead to unpredictable or disappointing outcomes. The best drug or medical device, even when used as directed, may not always result in expected or desired results. The stakes are high, whether the company is in the clinical trial phase or commercialized.
Products liability coverage is an essential tool for safeguarding your business’s balance sheet and reputation. From the start-up stage through commercialization and success, it helps you manage risks that could otherwise doom your business to failure.
“You want to have coverage for any clinical trial because people are going to be exposed to your product,” says Kate Klaus, Senior Risk Management Attorney at Medmarc. “And once you’re ready for commercialization, you should have a policy in place on day 1.”
What’s Covered
Life sciences policies are tailored to each business, but they can cover a vast array of medical devices and in vitro diagnostic, biotechnology and pharmaceutical products. That can include everything from syringes to prescription drugs to artificial limbs.
What’s covered is important. So is who’s covered. A policy should cover additional insureds such as:
- Vendors
- Scientific advisory boards
- Sales reps, service techs, and product training and support staff
- Clinical research organizations
- Institutional review boards
- Independent engineers and consultants
- Medical staff members
In short, you should seek coverage that accounts for every potential liability. Your business’s future could lie in the balance.
Counting the Cost
How much a policy costs depends on many factors. To start, most underwriters will base their initial pricing on your type of product and your global sales figures, and for clinical trial stage companies, the number of enrolled participants in the trials. Underwriters review the company’s track record and safety practices, then compare what its history of adverse events looks like compared to those of competitors. Underwriters also look at similar products and any issues they’ve had.