What to do when things go wrong with your life sciences innovation—mitigating the damage

Despite your best efforts, problems can occur—anything from isolated injuries to massive lawsuits. (That’s why you have products liability coverage, of course.) If the worst happens, you should take steps to mitigate the damage to your company.

The first step is to reach out to your insurance carrier. This may be the first incident your company has faced, but it’s most assuredly not theirs. “This is what we do every day,” says Andy Hall, Executive Claims Specialist at Medmarc. “It’s hopefully something the insured doesn’t encounter very often.”

“We’ll ask if they’re pulling back product as needed, if they’ve contacted FDA, if this is the kind of problem where they need to hire a crisis-management team,” Kate Klaus, Senior Risk Management Attorney at Medmarc, says.

It’s also important to take every incident seriously. For example, even if the number of incidents is statistically insignificant—say 2 in 200,000—you should still investigate and take appropriate action. “At the end of the day, if you’re facing a jury, they’re just people trying to figure out if you’re a good company or not,” Hall says.

Medmarc often takes additional steps, such as counseling clients to train employees who may be deposed with some frequency. “We’ll work with you to make those folks good witnesses who are familiar with the process,” Hall says. “We see that kind of thing as a long-term benefit to both the insured and Medmarc.”

Why Documentation Matters

Hall believes many large verdicts, including so-called nuclear verdicts (exceptionally high jury awards typically $10 million or more),  happen when defendants appear to have cut corners to save money. “There are many other considerations, but that’s the way folks look at it,” Hall says. “By documenting your decision-making, you can defend your actions in a way that makes you look the most credible.”