Insurance Program Results
Clinical Trials: Demand Grows with Drug Development
Capacity for clinical trial coverage will surge in the coming months on growing demand. New products will enter the market and existing carriers will expand coverage. Carriers’ interest is being fueled by favorable loss conditions as well as anticipation that more U.S.-based clinical trials are in the pipeline.
Hospitals and doctors are increasingly participating in clinical trials to generate additional revenue. The number of registered studies significantly increased in the last five years. As of early July, more than 194,000 studies have been registered, a 90 percent increase over the 101,179 studies registered in 2010. Almost half of the studies are located outside of the U.S. but 39 percent are domestic. Despite the fact that almost half of clinical trials are performed overseas, signs suggest more trials could return to the U.S. The Federal Drug Administration (FDA) is working to incentivize domestic trials by more readily accepting data from trials conducted under U.S.-based, FDA-registered institutional review boards. It is also moving toward expediting device review times and diminishing some administrative barriers to initiating trials.
The Affordable Care Act (ACA) hasn’t significantly impacted clinical trials, but ACA reform includes a push for greater availability of generic drugs, creating additional opportunities for clinical trials. Demand for drug development to provide biologics and personalized medicine also continues to increase. Research dollars are also being used for aging research and highly infectious diseases such as Ebola.
Additionally, basket trials – covered by ProAssurance’s Medmarc – are becoming a more prominent method for testing in the oncology filed. This type of trial tests targeted therapies that will work on specific genetic mutations.
Despite relatively tame losses, exposures continue to grow in this segment especially with more entities involved during the clinical trial process. Academic institution site investigators complicate indemnification trails exposures if negligence occurs at the academic institution. Academic institutions often don’t procure coverage for clinical trial activities and a cloudy and cluttered indemnification trail can lead back to the trial sponsor and put the institution at risk. CNA developed educational resources and a product liability coverage form to specifically protect these institutions. A heightened awareness of personal liability for institutional research and data safety presents personal liability risks for observational clinical trial board members and the board’s actions. CNA’s offers a custom products and professional liability policy for a board overseeing clinical trials to addresses potential negligent actions in duties performed for clinical trial oversight.
These evolving risks and the desire to remain competitive will give rise to expanded coverage from entrenched markets. Lloyd’s of London and Liberty International Underwriters via Pro-Praxis added clinical trial E&O coverage earlier this year. CNA added an admitted policy option earlier this year to try to target the underserved small and midsize life science businesses. It also reduced its minimum premiums and revised the policy forms last year. Medmarc expanded clinical trial coverage to provide a new policy option last year. Other carriers in this space, such as Berkley Life Sciences, ACE, Beazley, Allied World, Chubb and Allianz may consider similar coverage adjustments.
Crittenden expects claims will likely remain favorable and bodily injury claims will be rare despite emerging risks. Claims more often arise out of the informed consent process with questions as to whether risks were fully explained and understood by trial subjects. Claims for injuries that fall outside of the informed consent document remain problematic. These claims often emerge when participants experience symptoms or bodily harm as a result of the tested drug or device when the informed consent form did not adequately describe the severity, mischaracterized the likelihood of the symptom, or didn’t describe it. There have been concerns about trials that link financial payments to the contract research organizations (CROs) and principal investigator to the success of a trial. Also, some doctors have fabricated their credentials or résumés in order to oversee trials that offer financial payment or reputational rewards. Severity is limited to CROs that allegedly mismanage a trial, with losses for global CROs ranging from $1 million to $20 million, depending on the size of the contract and the type of error.
CNA expects to grow in this space aggressively through partnerships with its European arm and the development of products specific to clinical trials. This year the carrier launched an admitted version of its life sciences product that includes coverage for clinical trials. The product offers the same coverage as CNA’s non-admitted product, including professional and products liability, but provides better access to small and midsize companies that may not be able to afford typical industrywide minimum premiums of $10,000 per $1 million layer. The coverage also offers mitigation expense, Class 1 product recall expenses, personal and advertising injury stemming from clinical trials and worldwide coverage. CNA reduced its minimum premium to $2,500 last year and introduced a new policy structure that offers coverage parts to better identify coverage on the policy. It also increased its use of technology in the quoting and to streamline the submission binding process and allow brokers and agents to access small business products.
CNA offers a program to cover companies with headquarters in the U.S. CNA’s European operation uses Hardy Underwriting out of London and CNA Insurance Co. Ltd. to offer international coverage. CNA currently writes coverage in 12 countries, but hopes to double number that by the end of this year. Its emphasis will continue to be clinical trials administered by U.S. headquartered companies, which may opt for a global coverage endorsement. The carrier can write non-U.S. headquartered companies doing trials in the U.S. as well. CNA accounts have access to a myriad of P&C coverages including CNA Paramount with Life Science specific property and general liability coverages, commercial auto, umbrella and work comp. Coverage is offered through CNA-appointed agents and brokers, and the life sciences department is seeking to appoint additional agents and brokers with a specialization in life sciences.
Copyright © Crittenden Research Inc., July 20th, 2015
Miscellaneous Medical
Administered By: Beazley
Distribution: Direct/Broker
| Industries: |
Blood/Tissue Banks, Clinical Trials, Clinics/Infirmaries (Correctional Health), Dialysis Centers, Emergency Response Services (Ambulance), Home Healthcare, Laboratories, Medical Clinics/Infirmaries, Medispas, Mental Health/Behavioral (Counseling/Counselors), Pharmacies, Rehabilitation Facilities, Research/Research Organizations (Clinical, Etc.), Substance Abuse Rehabilitation Facilities & Services |
|---|
Carriers: Beazley Insurance Co. Inc.
Coverage: Commercial Auto, Employee Benefits Liability, Errors & Omissions (E&O), Excess, General Liability, Products & Complete Operations Liability, Professional Liability, Umbrella/Excess
Limits: up to $25 million (Primary, Excess, Excess Follow Form, Umbrella)
Healthcare
Administered By: CapSpecialty
Distribution: MGU
| Industries: |
Ambulatory Surgery Centers (ASCs), Blood/Tissue Banks, Clinical Trials, Federal Tort Claims Act Clinics, Home Healthcare, Hospice, Imaging Centers/Diagnostic Labs (X-Ray, MRI, etc.), Medical Clinics/Infirmaries, Medical Labs, Medispas, Nurse/Staffing Registries, Pharmacies, Research/Research Organizations (Clinical, Etc.), Urgent Care |
|---|
Carriers: Capitol Specialty Insurance Corp.
Coverage: Professional Liability, Regulatory Liability
Limits: up to $11 million
Life Sciences
Administered By: TDC Specialty Underwriters
Distribution: Carrier Direct
| Industries: |
Biotech, Clinical Trials, Pharmaceutical Risks |
|---|
Carriers: TDC Specialty Insurance Co.
Coverage: Completed Operations, Errors & Omissions (E&O), Products Liability
Limits: up to - $15 million (Primary & Excess)
Life Sciences Product-Complete Operations & PL Coverage
Administered By: Ironshore
Distribution: Direct/Broker
| Industries: |
Biotech, Clinical Trials, Life Sciences, Medical Devices, Pharmaceutical Risks |
|---|
Carriers: Ironshore Inc.
Coverage: Products Liability, Professional Liability
Limits: up to $15,000,000 (Limit Capacity)
Life Sciences Product & General Liability
Administered By: Ironshore
Distribution: Direct/Broker
| Industries: |
Biotech, Clinical Trials, Life Sciences, Medical Devices, Pharmaceutical Risks |
|---|
Carriers: Ironshore Inc.
Coverage: Excess, General Liability, Products Liability, Umbrella/Excess
Limits: up to $15,000,000
Medical Umbrella
Administered By: Markel
Distribution: Direct/Broker
| Industries: |
Blood/Tissue Banks, Clinical Trials, Clinics/Infirmaries (Correctional Health), Emergency Response Services (Ambulance), Home Healthcare, Hospitals, Imaging Centers/Diagnostic Labs (X-Ray, MRI, etc.), Medical Clinics/Infirmaries, Nurse/Staffing Registries, Occupational Therapist, Pharmacies, Physical Therapists, Social Services |
|---|
Carriers: Markel Corp.
Coverage: Umbrella/Excess
Limits: up to $25 million
Allied Health Facilities
Administered By: Pioneer Special Risk
Distribution: MGU
| Industries: |
Allied Health, Blood/Tissue Banks, Clinical Trials, Community Health Centers, Home Healthcare, Imaging Centers/Diagnostic Labs (X-Ray, MRI, etc.), Medical Labs, Nurse/Staffing Registries, Pharmacies, Physical Therapists, Schools |
|---|
Carriers: Lloyd's of London
Coverage: Commercial Auto (Hired & Non-Owned), General Liability, Professional Liability
Limits: $100,000/$300,000 - $5 million/$5 million (Primary), $1 million/$1 million - $5 million/$5 million (Follow-Form Excess)
Allied Health (Other)
Administered By: Kinsale Insurance
Distribution: Carrier Direct
| Industries: |
Adoption/Foster Services & Facilities, Clinical Trials, Emergency Response Services (Ambulance), Non Emergency Transportation (Medical), Pharmacies, Social Services |
|---|
Carriers: Kinsale Insurance Co.
Coverage: Excess, General Liability, Professional Liability
Limits: up to $5 million (Primary & Excess), up to $5 million (Follow-Form Excess (Supported/Unsupported))
Clinical Research Liability
Administered By: Allied World
Distribution: Direct/Broker
| Industries: |
Clinical Trials, Hospitals, Managed Care Organizations, Physician Groups, Physicians, Research/Research Organizations (Clinical, Etc.) |
|---|
Carriers: Allied World Assurance Co.
Coverage: Excess, Professional Liability, Umbrella/Excess
Limits: $1,000,000 - $3,000,000 (Standard Primary), up to $10,000,000 (Limit capacity)
Clinical Trials
Administered By: Pro-Praxis Insurance
Distribution: MGU
| Industries: |
Biotech, Clinical Trials, Research/Research Organizations (Clinical, Etc.) |
|---|
Carriers: Liberty International Underwriters, Lloyd's of London
Coverage: Abuse & Molestation Liability, Commercial Auto (Hired & Non-Owned), Errors & Omissions (E&O), Excess, General Liability, Professional Liability, Umbrella/Excess
Limits: up to $10 Million
Life Sciences
Administered By: James River Insurance Co.
Distribution: MGA
| Industries: |
Biotech, Clinical Trials, Life Sciences, Medical Devices, Pharmaceutical Risks |
|---|
Carriers: James River Insurance Co.
Coverage: Excess, General Liability, Products & Complete Operations Liability, Professional Liability
Limits: up to $10 Million (Primary or Excess Limits Available)
Foreign Clinical Trial Coverage
Administered By: Chubb Ltd. (Formerly ACE Group)
Distribution: Carrier Direct
| Industries: |
Clinical Trials, Life Sciences |
|---|
Carriers: ACE Group
Coverage: Errors & Omissions (E&O), Excess, Umbrella/Excess
Limits: up to $35 million (Risk Transfer: combined limits)
Life Sciences
Administered By: Chubb Ltd. (Formerly ACE Group)
Distribution: Carrier Direct
| Industries: |
Biotech, Clinical Trials, Life Sciences, Medical Devices, Pharmaceutical Risks |
|---|
Carriers: ACE Group
Coverage: Excess, Products Liability, Professional Liability, Umbrella/Excess
Limits: up to $10,000,000 aggregate (Sold Products for biotech companies of any size and specialty pharmaceuticals with less than $500 million in sales), up to $10,000,000 (Sold Products for non-implantable medical devices), up to $15,000,000 (Human clinical trials for biologics, pharmaceuticals, non-implantable medical device), up to $10,000,000 (Products Liability, E&O, and Medical PL for Contract Research Organizations & Site Management Organizations)
Life Sciences
Administered By: AIG
Distribution: Direct/Broker
| Industries: |
Biotech, Clinical Trials, Life Sciences, Medical Devices, Pharmaceutical Risks |
|---|
Carriers: AIG, Lexington Insurance Co.
Coverage: Excess, General Liability, Products Liability, Umbrella/Excess
Limits: up to $10,000,000 (Nutraceutical Manufacturers & Distributors), up to $25,000,000 (Medical Device Manufacturers & Distributors), up to $15,000,000 (Patented & Generic Pharmaceuticals)
Life Sciences
Administered By: CNA
Distribution: Carrier Direct
| Industries: |
Biotech, Clinical Trials, Distribution Risks, Life Sciences, Medical Devices, Research/Research Organizations (Clinical, Etc.) |
|---|
Carriers: CNA Insurance Cos
Coverage: Commercial Auto, Commercial Property, General Liability, Products Liability, Professional Liability, Umbrella/Excess, Workers' Compensation
Limits: up to $10 million
Life Sciences Package
Administered By: Chubb Ltd. (Formerly ACE Group)
Distribution: Carrier Direct
| Industries: |
Biotech, Clinical Trials, Life Sciences, Medical Devices, Pharmaceutical Risks |
|---|
Carriers: ACE USA
Coverage: Commercial Auto, Commercial Property, Crime, Employment Practices Liability (EPL), Equipment Breakdown, Excess, General Liability, Inland Marine, Umbrella/Excess, Workers' Compensation
Limits:
U.S. Clinical Trials
Administered By: Medmarc Insurance Group
Distribution: Direct/Broker
| Industries: |
Clinical Trials |
|---|
Carriers: Medmarc Casualty Insurance Co.
Coverage: Products Liability, Professional Liability
Limits: $1 million - $10 million
Clinical Trials
Administered By: General Star (Primary & Excess)
Distribution: Carrier Direct
| Industries: |
Clinical Trials |
|---|
Carriers: General Star National Insurance Co.
Coverage: Auto Liability , Completed Operations, Employment Practices Liability (EPL), Excess, General Liability, Predecessor & Successor Liability, Professional Liability
Limits: up to - $10 million
Life Sciences
Administered By: AmWINS Group, Inc.(Casualty)
Distribution: MGA
| Industries: |
Biotech, Clinical Trials, Laboratories, Medical Devices, Nutritionist/Dietitian |
|---|
Carriers: AmWins Group, Inc
Coverage: General Liability, Medical Malpractice, Predecessor & Successor Liability, Products & Complete Operations Liability, Professional Liability
Limits: Call for - Limits
Medical Facilities
Administered By: Hallmark Financial Services
Distribution: Direct/Broker
| Industries: |
Ambulatory Surgery Centers (ASCs), Blood/Tissue Banks, Cancer Treatment Centers, Clinical Trials, Emergency Response Services (Ambulance), Home Healthcare, Hospice, Imaging Centers/Diagnostic Labs (X-Ray, MRI, etc.), Medical Clinics/Infirmaries, Medical Labs, Medispas, Rehabilitation Facilities, Urgent Care |
|---|
Carriers: Hallmark Specialty Insurance Co.
Coverage: Cyber Liability, Employee Benefits Liability, Excess, General Liability, Medical Malpractice, Professional Liability, Umbrella/Excess
Limits: up to $10 million