Skip to Main Content Back to Top Let's Talk
Home Blog Navigating business insurance for clinical trials

Navigating business insurance for clinical trials

A young woman doctor was working at a microscope
Higginbotham H logo

Clinical trials have been fundamental in the advancement of medical science, involving the rigorous testing of new drugs, medical devices and treatments before they are approved for widespread use.

However, these trials also have the potential to carry significant risks, not just in terms of scientific failure but also in potential legal and financial exposures. This is when clinical trial insurance can supply a safety net for trial sponsors, investigators and participants.

Who needs clinical trial insurance?

Entities that may require clinical trial insurance include trial sponsors, which can be pharmaceutical, biotech and medical device manufacturers, principal investigators, trial sites, contract research organizations (CROs) and medical professionals. These stakeholders may be exposed to various risks during the trial phases, making insurance coverage crucial for their protection.

What does clinical trial insurance cover?

Clinical trial insurance generally covers product, service and operation costs related to the trials, specifically for pre-revenue companies. This may include coverage for bodily injury and property damage arising from the products and procedures being tested. The insurance policy may extend through the duration of the trial and to all locations where the trial is being conducted.

Learn More About Life Sciences Insurance

Phases of Clinical Trials

Clinical trials are generally divided into three phases:

  • Phase 1: Test the safety of a drug or device.
  • Phase 2: Evaluate the efficacy and side effects.
  • Phase 3: Compare the new treatment to existing treatments.

Each phase will have its own unique insurance needs, which will be influenced by factors such as patient count, safety considerations, market comparisons (for phase 3 trials), additional locations and foreign exposures.

Key Criteria for Clinical Trial Insurance

Several factors may impact the cost and scope of coverage for a clinical trial insurance policy. These include:

  • The strength of the trial protocols
  • The use of informed consent forms
  • The number of patients involved
  • The health demographics of the trial participants
  • The duration of the trial
  • The global scope of the trial
  • The level of risk associated with the product or procedure being tested
  • Insurance coverage requirements, either from a contract research organization or government entity

Domestic and Foreign Trials

Insurance coverage rules can differ significantly between domestic and foreign trials. Trials based in the United States typically have coverage limits set by CROs or trial sites based on the number of participants. Domestic trials can also cover any trial sites within that territory and provide additional coverage for medical professionals conducting the trial.

In contrast, foreign trials may often require a locally admitted insurance carrier in the country where the trial is conducted with statutory limits specific to that country. For global trial operations, insurers can provide worldwide coverage options that fill in any gaps left by foreign local-admitted markets. Additionally, the U.S master limit may be dictated by size and scope of trial.

The Importance of Runoff/Tail Coverage

Once a clinical trial concludes, there is still a risk of trial-related claims surfacing, even years after the trial has been completed. Because of this, runoff or tail coverage may be needed to extend liability protection for a period ranging from one to more than ten years after the trial’s conclusion. This type of coverage can be particularly beneficial for companies in merger and acquisition scenarios.

Securing Insurance for Clinical Trials

Insurance for clinical trials can act as a backbone for the safe and compliant conduct of medical research. It not only safeguards the financial interests of the sponsors and other involved parties, but it can also ensure that the trials can proceed with a focus on innovation and public health improvement.

As the landscape of clinical trials continues to evolve, so does the complexity of trial insurance needs. Higginbotham is here to help you stay informed and adequately covered in the critical field of medical science. Talk to one of our clinical trial insurance specialists today.

Not sure where to start? Talk to someone who wants to listen.

A great plan starts with a conversation. Let’s talk about what you need.

Let’s Talk

Request a Quote

Woman looking sideways to window in design office
Higginbotham H logo