Life Science blog; Reliance on premises & supply chains

Covid-19 has brought about many unprecedented challenges to business operations in just about every sector and the Life Science industry hasn’t gone untouched. However, there is genuine reason for optimism as the sector is only going to benefit from a further growth in demand.

Many within the sector are at the forefront of the Covid-19 efforts, and engaging with the wider life science community around the clock to deliver projects at unparalleled speeds. The pandemic has also highlighted the importance of a pharmaceutical research base, with the sector ready to double its Research and Development (R&D) activities in years to come. This will be aided by the governments’ recent commitment to £22bn funding into research annually, a significant proportion of which will be directed into the sector.

To deliver on contracts and engage in R&D, many life science businesses rely on their premises and tailored lab equipment. Most tend to be based within science parks, incubators or purpose-built lab spaces. Whilst there has been a steady increase in such premises in recent years, they still remain relatively sparse outside of the cities commonly associated with the life science sector. An increase in activity will also naturally create a greater reliance on supply chains that provide the foundations for any business.

Such reliance on tailored premises and supply chains for life science businesses requires careful planning and mitigation procedures to minimise the operational impact should an unexpected circumstance occur. There are many elements of this planning process that may be bespoke to your business but below we have highlighted two important parts that should form the basis of your conversations.

Business Continuity Plans

Businesses Continuity Plans (BCP’s) can provide a clear plan to mitigate the operational impact of worst-case scenarios such as significant damage to the business premises and lab equipment. This can include a strategy of how to best effectively continue working remotely in absence of a premises and equipment, whilst also considering suitable temporary accommodation nearby.

Likewise, similar assessments and mitigation procedures should be applied to key supply chain partners, should their business premises become uninhabitable which delays or stops work. Pro-active conversations and relationships within the sector can provide a clear plan in this scenario to avoid any adverse impact to ongoing or future work.

Business Interruption insurance

In light of Covid-19, Business Interruption cover has no doubt become a controversial topic for many. But rather than being the elephant in the room, the cover is arguably more important than ever for small to medium sized life science businesses.

In essence, Business Interruption traditionally covers a loss of income and/or increased costs of working incurred as a result of physical damage to the property that a business works from, in addition to a range of specific extensions that are bespoke to the needs of a business.

Working in tandem with BCP’s, the cover can protect against the loss of gross profit for a set period of time whilst a premises isn’t in a fit state due to damage. It can also provide the necessary costs to procure alternative premises and indeed any other increased costs to ensure that the business doesn’t suffer any diminishment to its anticipated gross profit.

When carefully reviewed, the cover can also protect against the financial impact of a business if a key supply chain partner is similarly impacted. In addition, sector-specific extensions to cover such as a change in controlled temperature causing damage to R&D stock can be considered to allow businesses to fully mitigate against a range of scenarios.


Against the backdrop of Covid-19, there are positive signs that the life science sector has the demand and funding to continue thriving. An increase in activity will likely correlate with a greater reliance on the tailored type of premises and equipment that life science businesses simply need to carry out their work.

Considering these worst-case scenarios, BCP’s and Business Interruption cover can go a long way to minimising the operational and financial impact to a business if these were to occur.

About the author

Ryan Legge is a Chartered Insurance Broker and has vast experience working with all manner of life science businesses from the research community upwards. If you have any additional queries or would like an alternative quote for your life science business get in touch with Ryan via phone or email:

07889 561 414 | [email protected]