Life Sciences Insurance

How is Life Science Insurance different from standard liability or professional indemnity cover?

Life science policies are designed specifically for the sector, with tailored wordings that address the key exposures these businesses face. A standard public and products liability or professional indemnity policy is typically written on a generic wording intended for any type of business. That means it can carry exclusions that directly affect life science activities, even if those exclusions aren’t immediately obvious when you read the policy.

There is also a structural difference worth understanding. Life science policies are typically written on a claims-made basis, with multiple sections under one policy covering products liability, professional indemnity, medical malpractice, clinical trials and more. Standard general liability is usually a losses-occurring policy with no retroactive date. If you are transitioning from a general liability policy to a life science policy, this distinction matters and is something your broker should walk you through before you make the switch.

How much does Life Science Insurance cost in Australia?

Premiums vary significantly. They depend on the sections of cover you select, your turnover, claims history and the risk profile of your activities. A pure R&D consultancy will generally sit at a different premium level to a manufacturer running clinical trials and distributing products internationally.

Liability limits generally range up to $20 million per section depending on insurer appetite. Where contracts require higher limits, multiple layers of cover can be arranged to reach the required threshold.

Do I need Life Science Insurance?

If your business is involved in the research, development, testing, manufacture or distribution of products that may affect human or animal health, or you manage sensitive clinical or patient data, this type of cover may be relevant to your risk profile. Risks such as product defects, data breaches, research errors or participant injury can arise well before a product has been commercialised.

Whether a specialist life science policy or a different structure suits your business depends on your specific activities. That is a conversation worth having.

Does Life Science Insurance cover clinical trials?

Yes, but how it is arranged differs between insurers, and this catches people out. Some insurers can include clinical trials liability within a single comprehensive life science policy. With others (such as Sura, and Chubb in some cases), a separate clinical trials liability policy may need to be arranged alongside the main program.

For trial cover, insurers will typically want to review your study protocol, patient information sheet and patient consent form. Having these ready when you approach the market speeds up the quoting process significantly. We can guide you through what is needed.

Can I obtain a Chubb Life Science policy through SMART Business Insurance?

SMART Business Insurance has access to a range of insurers providing cover for life sciences organisations, including Chubb, CFC, Berkley, Keystone Underwriting and Sura. Whether a combined policy or a modular package suits you best depends on the nature of your business and its specific risk profile. That is part of what we work out with you.

What information do insurers need to provide a Life Science Insurance quote?

Unlike many business insurance products, life science risks generally can’t be quoted instantly through a portal. Underwriters typically review your company website, your products’ ingredients and intended use, manufacturer details including country of origin and their own insurance arrangements, and any regulatory approval requirements for the product, drug or ingredient, such as TGA approvals.

For clinical trial cover, a standard submission generally includes the study protocol, patient information sheet and patient consent form. An application form is typically required across the board, and we can assist you through that process to keep things moving as smoothly as possible.

Are there life science products that insurers won’t cover?

Yes, and knowing this upfront saves wasted time. Insurer appetite varies, and some product categories are commonly declined or heavily restricted. Examples include hip and knee replacement kits, breast implants, contraceptive devices, implantable silicone, infusion devices (other than on an excess basis), certain mesh products and devices containing DEHP or lead.

On the other hand, areas like nutraceuticals, medicinal cannabis, R&D businesses, laboratories, skincare and veterinary products are actively sought by some underwriters.

A broker who knows each insurer’s appetite can direct your risk straight to the markets most likely to engage with it. If your business falls into a category that isn’t widely accepted, we can have a direct conversation with the insurer about what is possible and work through the options with you.

Why do life science businesses need cyber cover?

A few things stand out when it comes to cyber risk in this sector.

The data. Clinical trial results, patient records and proprietary research data are high-value targets. A breach doesn’t just mean IT recovery costs. It can mean notifying affected individuals, regulatory scrutiny from bodies including the OAIC, and reputational damage that flows through to commercial relationships and investor confidence.

Medical devices. Any device with embedded software or network connectivity is a potential attack surface. Regulators have been increasingly clear that cyber security is part of medical device risk management, and a breach involving a connected device can move quickly from an IT problem to a product liability issue.

Business continuity. System downtime in a laboratory or manufacturing environment can corrupt trial data, halt production runs or delay regulatory submissions. The financial consequences extend well beyond the cost of IT recovery.

How cyber cover is arranged varies. Some life science policies include cyber and privacy as a section within the program. With other insurers, a standalone cyber policy provides broader limits and more tailored incident response services. Either way, the key is making sure there are no gaps between your life science policy and your cyber cover. Cover generally includes data breach response costs, forensic investigation, business interruption, extortion payments and third-party liability for privacy breaches and network security failures.