When ‘standard’ risks need specialist cover

Insurance needs can become far more complex if policyholders don’t fully comprehend their potential risk exposure.

Specialist life sciences cover is not something that many organisations understand. ‘I don’t need it’, many might say. ‘I’m covered with my other insurance’. Which raises the question – are you absolutely sure about that?

Precision engineering is an industry that will always be in demand, due to the sheer number of increasingly small components that are required by all manner of businesses these days. The world of medicine especially has expanded from the scalpel to micro machine parts.

Companies that engineer components for life science firms can cover a wide range of devices and parts, from those required for pacemakers to the parts required to construct orthopaedic implants – and that’s just the start.

Unexpected changes

These engineered components can look mundane, even ordinary – which is where the problem arises. They might not be immediately identified as medical in nature and a manufacturing company needs to realise that there may be a potential exposure to life science risks based on the end use of the parts they are producing.

To take an example, a precision engineer makes complex metal components normally for machinery or maybe robotics. However they also make a similar component for use in an orthopaedic implant. From their point of view the risks are very similar in that they are both metal parts made to a high quality specification.

Their initial take on the risks involved might be one of mechanical failure. But what happens if that failure occurs once the end product containing the component has been implanted into a patient? Now the risk exposure is more complex.

Informing your insurance provider

Product liability exposure expands exponentially after products are implanted into patients and, as a result, companies need to inform brokers of the details of their activities – specifically the end use of their product. Perhaps you’ve always made the same type of product but never considered the potential risks associated with its end use? Or perhaps you’ve recently changed from precision engineering to medical implants. What could appear as a small change in activity on mechanical level could have huge implications on the level of specialist cover you now need.

The need for communication

Potential liability must be properly understood, both by you and your insurance provider. If it’s not, there is a danger that any future claim could be refused.

Identifying risks is a complex process but one which is absolutely essential in order to procure the correct level of cover for your business. Clear communication of both the manufacturing process and the potential end use of the product is key to getting the protection you need.