Life Science & Biomedical Insurance
Supporting your business in a fast paced, changing world
Life science companies face multiple challenges throughout the discovery, development, and commercialisation process.
Increasingly stringent regulations and penalties for violations mean that compliance is at the forefront of every step in the process. Our specialist life science and biomedical team can assist in placing bespoke insurance as well as advising on how to mitigate your risks.
With extensive experience working in the industry we have experience advising on all manner of complex risks.
Get in touch with the team today and find out how we can help you.
We have worked with a wide variety of organisations from small start-ups to global enterprises and can provide insurance for a range of activities including:
Medical technology manufacturing and supply
Cosmetics and supplements
Clinical research and development
Some areas where we have been able to provide specific advice or additional cover to our clients include:
Temperature controlled stock - Cover for an accidental change in temperature causing irretrievable damage
Defending your patent - Most insurance policies will exclude the costs of defending your patent so we can source insurance to cover the costs associated with engaging a specialist law firm
Foreign territories - As businesses grow and expand into foreign territories it’s essential that your insurance arrangements are aligned to this. Having employees or entire entities based abroad requires a more tailored approach; we have advised and sourced cover for this on many occasions
Frequently Asked Questions
Your key third-party liabilities covers will be subject to a limit on its jurisdiction, i.e., the overseas territories in which a claim can be brought. It is therefore vital that this aligns with new territories that a business begins working in.
Most insurers commonly cover all territories, aside from North America which requires adding back in. UK insurers view the North American courts cautiously, owing to its litigious nature and punitive approach which is considerably different to that of UK and the EU, and can inflate defence costs and eventual settlements. It is worth noting that most insurers can cover North America, but their approach to doing so will be conservative due to those inflated costs. This will include insurers often limiting claims emanating from North America to “in the aggregate”, whilst including defence costs within the overall limit of indemnity.
Other considerations include cover for local employees and any assets you may need to insure. These should be procured in accordance with local laws in the respective country.
Insurers commonly now provide a host of additional benefits to risk manage the threat of cybersecurity, such as phishing software, employee training tools and real time intel. This, in addition to 24/7 breach experts often provided, can significantly improve internal practices to manage this risk.
From a cover perspective, insurers will indemnify a business for its costs incurred from any extortion or ransom demand, costs of repairing system damage and rectifying such data, and importantly the associated loss of gross profit. In the event of cyber infringements harming a third party, insurers can also cover defending and settling such allegations, in addition to associated PCI fines.
Insurers commonly provide cover for the defence of an Intellectual Property (IP) breach if you’ve infringed third party IP, within a Professional Indemnity policy. This wouldn’t cover the costs of pursing a legal action against a third party, should they have infringed your own IP. A specialist IP policy can cover both first and third party costs
Aside from the defence costs, insurers commonly cover compensation awards against a business. Additionally, insurers can extend to cover the loss of any IP rights and the consequential loss of future profits. The cost of litigation can be significant in some cases and so a key benefit of insurance cover is that it can protect cash-flow as insurers will cover legal costs from day one for any defence or allegation of infringement. The clear benefit is that a long running dispute therefore doesn’t tie up any business capital.
A standard Directors & Officers (D&O) policy will provide a limit of indemnity to protect the business (specifically its appointed directors), against wrongful acts committed against a third party. A claim could come from any source, but are most regularly seen from investors and clients who opt to make an allegation specifically against a director, either in isolation or in addition to a claim against the entity.
Some policies will also extend to cover non-executive directors (NED), acting in their capacity for a business in addition to covering previous acts of retired directors. Having NEDs covered can be reassuring for any individual acting for a business.
The immediate costs of recalling products and engaging in a large scale logistical operation can be significant, in addition to replacement and reproduction. Whilst few general policies will extend to cover the costs of a recall, a specialist standalone policy can.
A Product Recall policy can provide a business with the financial reassurance and support they need by covering the costs of a recall, and an investigation, as well as replacing the loss of sales. Certain policies also cover the costs of appointing a PR firm to negate any negative publicity, in the event of a recall due to a faulty product
R&D property, such as consumables, cultures, samples and resulting products prior to regulatory approval, should be specifically insured and cover the costs of reproducing that property should an event occur causing damage.
However, rather than insuring R&D property for the standard set of insurance perils, it is important to think about the specific risks associated with the environment such as an accidental change in controlled environment conditions which could cause unexpected stock damage. Additional examples of specific risks that can be covered against R&D property include damage caused by contamination (also covering the costs of cleaning up and removing such contaminants).
Business Interruption traditionally covers a loss of income and/or increased costs of working as a result of physical damage to the property that a business operates in, as well as a range of sector specific extensions. Tailored policies can incorporate extensions to include covering the costs of continuing research expenses and lost milestone payments, which can provide peace of mind for businesses.
Continuing R&D expenses (in the event of physical damage interrupting work) would protect against the costs being incurred by a business had such damage and interruption not occurred. Similarly, if damage has occurred and interrupted R&D activities, cover can also be sought for a loss of income, i.e. milestone payments. Therefore, future and dependent milestone payments used to further R&D operations can potentially be reimbursed by insurers.
If you are a sponsor for a trial, you often have the responsibility to insure the third-party liability exposure.
Clinical trial cover often requires a specialist and stand-alone policy, specifically covering the risks associated. The two primary elements to cover are negligent harm and non-negligent harm, also known as no-fault liability. Both of these would cover the legal costs and compensation awarded to a volunteer. The extent of the claim would be determined by the injury/impairment suffered by a volunteer as a result of negligence, or in the event of no-fault liability, compensation would correlate with the Association of the British Pharmaceutical Industry (ABPI) guidelines.