COVID-19 has brought the importance of clinical trials to the forefront. Only by having this scientific expertise has the world been able to develop the much needed vaccines. But what happens behind the scenes to make sure that clinical trials take place safely?
Here we share a guest post from our colleague, Hanna Beaumont, FIRM – Client Partner, Science & Technology at Partners& that explains how clinical trials insurance has adapted to meet the ever-demanding needs of this specialist industry.
With clinical trials taking centre stage, how is insurance adapting to the changing landscape?
The spotlight on clinical trials and what they mean to our everyday lives is perhaps now greater than ever before in modern history. With more and more activity taking place in this highly specialist and important field, risk management and insurance has an ever-increasing role to play.
Clinical trials liability insurance will always have at its heart ‘putting it right’ for the patient or participant undergoing the trial if something goes wrong. However, there are many other interwoven strands to trials insurance, of which you may not be aware.
In seeking better ways to treat disease in humans, those engaged in the endeavour of Life Sciences must embrace risk on many levels. We must test rigorously to establish the safety and efficacy of each new drug, vaccine, medical device or surgical procedure. Our human volunteers are protected with a framework of risk management, including rigorous controls and procedures – but discovery will always involve risk and, where mitigation reaches its limits, insurance must provide a safety net.
Alongside regulation and operational controls, it’s vital that a well-designed and robust insurance programme is in place to provide financial compensation for participants – and financial protection for the research organisations conducting these trials.
How does clinical trials liability (CTL) insurance work?
Clinical trials carry obvious risk – for the patients or subjects, and also for other stakeholders in the process who may incur substantial liabilities if things go awry.
CTL provides protection in two ways:
- Negligent harm to trial subjects – caused as a result of negligence, lack of due diligence/care on the part of the sponsor, investigator or CRO. The policy pays for legal costs and expenses, and compensation or “damages” awarded to the subject.
- Non-negligent harm (or “no-fault” compensation) – harm with no specifically identified cause, but likely to have arisen from the subject taking part in the research. Subjects in clinical trials will sometimes suffer non-negligent harm, with the expectation of being compensated despite there having been no negligence on the part of the sponsor or CRO.
CTL insurance is a vital piece of the risk mitigation jigsaw, and in many territories a legal requirement.
The universe of clinical trials is changing, as new non-pharma products come into the market with clinical application – from apps to medical robotics.
How insurance is evolving with the trials landscape
These days, with the advances in “medtech”, clinical trials are not just about drug development (the development of a “new chemical entity”). They may involve the clinical testing of a new medical device or surgical procedure. And as the liabilities change, so too has the insurance evolved, offering additional lines of cover around risks and liabilities arising from contracts between trial parties (e.g. withheld fees). Policy (or multi-trial programme) periods have shifted to cover the whole length of the trial as opposed to an annual policy which has to be renewed every year mid-trial.
Case study: software error
A software developer created a platform to upload data from medical imaging devices for use in a clinical trial. The platform enabled access to records across multiple trial sites. During the course of a change order update, an error was introduced into the code.
The developer resolved the issue, but multiple images had to be re-taken because of the coding error. The insurer was able to negotiate a favourable settlement before the issue went legal, to prevent any further costs. In fact, the professional indemnity cover sold alongside the CTL policy bore the cost.
Selecting a CTL insurance broker
Connecting with the right advice can really make a difference. CTL is a unique and specialist area of insurance and as such, is only available from specialist insurers such as CFC, Chubb, CNA, QBE and Lloyd’s of London. These policies are only accessible via an insurance adviser with the relevant expertise.
Before you purchase CTL insurance, make sure your adviser has:
- Genuine Life Science expertise in-house
- Lloyd’s accreditation
- Speed of response – how quickly do they get back to your initial enquiry?
- Foreign and domestic capability
- Understanding of country-specific requirements
Good management of clinical trials should be based on a genuine partnership with your insurance adviser, and a culture of openness, trust and understanding.
To find out more, talk to our team of experts, or contact Hanna directly.
With thanks to CFC Underwriting for their case study material