Insuring Your Life Science Company
What You Need to Know About
Life Science Insurance
Since 1956, RJ Ahmann Company has been a premier provider of insurance for life science companies nationwide.
Protecting your company's financial well being goes hand in hand with protecting the health and well being of the people, plants, animals and environment you are working so diligently to serve.
Any company that researches or manufacturers medical devices, pharmaceuticals or other life science products or provides services to these industries has complex risk management needs that require an insurance agency that specializes in life sciences. Below you'll find some helpful information about how to best protect your life science business.
Types of companies that need specialized professional insurance assistance include:
- Biotechnology research and development
- Medical device manufacturers and distributors
- Contract research organizations
- Contract sales organizations
- Contract manufacturing organizations
- Clinical trial companies and facilitators
- Any company involved in any aspect of the life sciences industry
- Pharmaceutical manufacturers and distributors
According to 2005 data, medical products liability verdict awards for single claimant lawsuits averaged $3.2 million. In more than half of the cases, the award topped $1 million.
- Jury Verdict Research
What are some of the insurance and risk management needs life science companies should consider?
In the life sciences industry, having the precise mix of insurance coverage for your business' unique risks is vital. Some exposures that require specialized solutions include:
- Clinical trials for phase I, II and III products, including global insurance and local certification in accordance with the laws of the country where clinical trials take place (Applies to sponsors, monitors, clinical investigators and investigational review boards)
- Research animals and their corresponding historical data
- Clean room contamination
- Precision instrument replacement
- Loss of grants, endowments and other financial contributions
- Bio contamination
- Spoilage
- Loss of medical and biotechnology research records, including cost to recover
- Intellectual capital infringement, including patent, trademark, copyright and trademark for defending your intellectual capital or responding to a third party complaint against your company
- Inadvertent disclosure of private and confidential information whether stored electronically, in a file cabinet or while being shipped to another location
- Transit exposures, including calibration, spoilage, inland and ocean
In many cases, the following coverages are needed:
- General liability coverage: This coverage is critical anytime you have a product or service that can result in bodily injury or property damage to others. Even if you are providing a 510k product or a service connected with the promotion or research of a product, you have exposure to a lawsuit for bodily injury or property damage to a third party. In fact, in some jurisdictions throughout the world consider the manufacturer of a product or provider of a service to be an equal party to a claim in which the doctor makes an error.
- Latent injury liability coverage: In many cases, bodily injury is not discovered until years, even decades after it is applied, implanted or used by a patient. Historically, a multitude of devices and drugs have either malfunctioned or over time resulted in birth defects and other serious injury. When cases reach class action status, the settlement amounts can be staggering. For example, settlements for IUD birth control devices and silicone breast implants have reached hundreds of millions of dollars. Even with informed consents signed by patients entering clinical trials, if bodily injury results, whether it is determined to have taken place at the time of the trial or years later, properly written liability protection can protect you and your investors for years to come.
- Incidental medical malpractice liability: If you have doctors and nurses on your corporate staff and they are named in a medical malpractice lawsuit as a result of their advice and assistance in your company's product or service, they may not have professional medical malpractice liability protection unless specifically included as part of your overall liability insurance program.
- Errors and omissions liability: This exposure is often overlooked by life science companies, yet the potential for a loss is great. This coverage will protect you if you make an error or omission that causes a financial loss to another business. Imagine what happens if the equipment you manufactured or installed in a hospital malfunctions because of an error you made in its calibration. It could cause the hospital to delay all surgeries for the next two days, and the hospital will suffer a financial loss when it has to contact the patients, doctors, anesthesiologists and technicians to reschedule or cancel surgeries. The errors and omissions coverage is your protection should you be sued for loss of revenue and extra expense suffered by another company.
- Product recall: A product recall can result in a huge impact on your bottom line. It can also create additional liability. Managing this risk and determining if a transfer through insurance is recommended, can only be determined by an agent who specializes in the life science industry.
- Workers' compensation: Every business faces the risk of employee injury, but in life sciences, the risk of occupational disease is of particular concern. Employees may be exposed to chemicals, pathogens and viruses that cause consequential diseases years later. In addition, employees often experience repetitive motion injuries such as carpel tunnel from working with tiny products (like hearing aids) and precise instrumentation.
- Directors and officers: If you have a board of directors or investors, a solid D&O policy will protect their personal assets if they are sued for the decisions they've made on behalf of the company.
- International exposures: If you conduct trials, or if you manufacture or service your product in a foreign country, you are subject to each country's insurance rules and regulations. Liability exposures vary from country to country.
- Property coverage: Like all businesses, life science businesses need property insurance to protect buildings and equipment.
- Business Interruption: When property damage occurs, business interruption typically ensues. Losing access to your clean room, use of critical technology or other medical equipment can cost millions.
A smart solution
Life science exposures require a specialized agent and a specialized mix of coverage. If you need insurance for your life science company, or if you just want to learn more, RJ Ahmann can help. Based in Minneapolis, Minnesota, our specialized team has helped many companies grow and prosper with the right life science protection.
Our highly-trained and experienced staff negotiates customized coverage extensions with financially sound life science insurance providers. Furthermore, we offer global capabilities to provide you with worldwide coverage and claims handling.
Why RJ Ahmann Company?
- We specialize in insurance and risk management for the life sciences industry, and provide in depth analysis of your risks. In fact, 98 percent of our clients renew with us each year.
- Our team of skilled insurance experts will provide the highest level of expertise available when reviewing your exposures, contracts, policies and programs to develop a tailored insurance program that will provide protection for your unique needs.
- LifeScience Alley, a Minnesota based trade organization, and a premier voice in the medical and life science industry, has selected RJ Ahmann as their preferred insurance provider.
- We offer collective expertise and unparalleled international clout as the only agent in Minnesota who is an invited member of TechAssure - an international network of agencies that specialize in the life science and technology industry.
- Our partnership with WING allows us to expand our global service to most every corner of the globe.
- We enjoy preferred access to all of the major life science/technology insurance carriers to create competitive insurance pricing and coverage. We have also developed unique program offerings with these key insurers.
- We provide easy access to risk management and insurance tools, disaster assistance, and ongoing guidance in cost effective insurance and risk management programs.
- Because of our expertise, focus and skill in insuring technology companies as well as life science companies, we have been the endorsed provider for Minnesota High Tech Association for more than 15 years.
Ready to Learn More? RJ Ahmann is Ready to Help with Solutions for Life Science Insurance!