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    As an established leader and innovator in the insurance markets for healthcare, technology and cyber, we have been able to draw on the experience of underwriting life sciences risks globally for over two decades. Our various Life Sciences product offerings have a broad, flexible approach to meet the current and emerging needs of the sector. Based on our expertise in this risk space, we’ve compiled some informative content to help debunk some of the common misconceptions we have encountered and the nature of the coverage available to address exposures.

    Misconception 1:

    Dietary supplements are not regulated by the FDA

    We sometimes come across a misapprehension that dietary supplements are not regulated by the US Food and Drug Administration (FDA). The FDA does have regulatory authority over them deriving from the Dietary Supplement Health and Education Act (DSHEA) of 1994. Manufacturers and distributors of dietary supplements and dietary ingredients are prohibited from marketing products that are adulterated or misbranded and these firms are responsible for evaluating the safety and labeling of their products before marketing to ensure that they meet all the requirements of DSHEA and FDA regulations. Note: contact us for more information about our NutraGuard product that provides a broad, flexible coverage that addresses the needs of the nutraceutical industry.

    Misconception 2:

    Insurance policies will respond to contractual liabilities that the insured signs on to

    There is frequently an expectation that Life Sciences insurance policies will automatically respond to contractual liabilities that an insured has assumed. This is not necessarily the case and it is therefore essential that insureds consult with brokers, underwriters and claims managers who can provide input on how the provisions of an insured’s contract(s) would respond against the indemnity clause(s) in its policy. Discussions can also be had regarding various stipulations of the contract, to ensure the client is properly insured, and what gaps could possibly exist.

    Misconception 3:

    I have a sold products risk and I need Professional Liability coverage

    In a similar vein, when we are presented with a sold products risk, usually for a medical device or a pharmaceutical, we often meet with an assumption that Professional Liability coverage is essential. However, Products Completed Operations is intended to provide coverage for claims arising out of a named insured's products and operations which result in bodily injury or property damage. 

    Misconception 4:

    Distributors of medical products have no liability for the products they sell and therefore do not need coverage

    While distributors of medical products are not the true product owners, they are within the chain of commerce and are therefore exposed to potential litigation. When losses are severe, typically all parties are named in suit. As such, it may not be a question of liability, but rather the costs of defense. Without products coverage in place, policies would not provide coverage for such litigation costs where a distributor is named. Additionally, distributors may have an inherent duty over the appropriate distribution of their products. The opioid pandemic was a prime example of this and many distributors are being found liable for their distribution practices - even though they do not own the products themselves. It is therefore essential that distributors and their brokers review the existence and extent of products coverage in relation to their operations and exposures.

    Misconception 5:

    There is currently an allied health policy in place, so there is no need for a life sciences form

    While many insureds' needs may be addressed by an allied health policy form, life sciences risks often have unique exposures that may not be covered, or they may take on additional exposures as they grow and diversify. For example, generally allied health policies do not provide E&O coverage for a financial loss which can be critical for insureds in the life sciences sector. It is essential to confer with an underwriter to identify and address potential coverage gaps and ensure your policy can adapt and grow with the risk.

    Misconception 6:

    I do not need insurance coverage because I use airtight consent forms and thus do not have any liability

    Strong consent forms are an essential risk mitigation vehicle for insureds in the life sciences space, but they should not be relied on absolutely. Consent forms do not absolve you from all liability, and it is difficult to predict how allegations could unfold. Many factors can come into play, especially when different governing bodies and jurisdictions are involved. It is also important to remember that an essential part of every policy is the defense expenses component, as insureds will incur legal costs/expenses to defend themselves, even from unsubstantiated allegations.

    Misconception 7:

    I need Professional Liability on a Life Sciences risk

    The terms “E&O” and “Professional Liability” are often used interchangeably, and coverage can vary by industry and/or sector. We often find a perception that a Life Sciences insured must have Professional Liability coverage, but we offer 1) E&O: a liability coverage which helps protect insured against professional services provided to a 3rd party which results in a financial loss and 2) Healthcare Professional Services: liability coverage which helps to protect the insured against negligence in the scope of rendering or failing to render healthcare related services which results in a bodily injury.

    Products Completed Operations would provide coverage for claims arising out of a named insured's products and operations which resulted in bodily injury or property damage.

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