PRODUCT: Product liability insurance for bio-pharmaceutical and medical device companies

COMPANY: OneBeacon Technology Insurance®, a member of OneBeacon Insurance Group, in affiliation with R-T Specialty LLC

BEST RATING: A (Excellent)

AVAILABILITY: Coverage is available on an open-brokerage basis.

FOCUS: For more than a decade, OneBeacon has provided clinical trials coverage for medical device companies and bio-pharmaceutical companies. Per U.S. tradition,that coverage has been included in product liability policies available on a 12-month policy term.

But clinical trials protocols often last anywhere from 18 to 24 months—a discrepancy between policy term and actual trial length that not only inconveniences clients, but results in aggregation issues when a U.S. client conducts a trial overseas. OneBeacon addresses both problems by expanding its offering for life-sciences companies. For the first time, “clients only need to worry about their clinical trials insurance program needs once,” says Todd Lauer, vice president of medical technology. OneBeacon is “the first insurance group in North America to officially launch this product,” which Lauer says emulates those offered by foreign counterparts.

Aggregation issues that occur with overseas trials can involve U.S. insurance carriers that offer foreign local admitted clinical trials coverage with a maximum liability limit—typically $30 million—available for any one client or clinical trial exposure, due to local admitted regulatory requirement. That maximum “may limit the insurance carrier to issue only a few foreign policies,” Lauer says. If a client’s needs exceed the maximum, they must purchase the additional insurance from a second carrier, creating a more cumbersome program with potential coverage gaps.

With the expanded OneBeacon product, in affiliation with R-T Specialty, “we have solved the aggregation issues and not only will our approach provide concurrency with the policy terms issued overseas, it will provide difference in limits,” Lauer says. The difference in limits occurs when a clinical trial claim exceeds per-claim limits. “Our policy would afford additional limits of liability up to our stated limits over that local admitted clinical trial policy,” Lauer says, adding that policy terms and conditions would still apply to that claim. In the case of a specific exclusion within the policy, additional limits may not be available.

Agents and brokers will also benefit from a simplified buying process and the elimination of subsequent renewal cycles and aggregation concerns, Lauer says.

UNDERWRITING: Coverage includes pure claims-made coverage; products used in human clinical trials; warranties or representations; failure to provide directions, instructions or warnings; products loaned or rented to others; and clear related claims language to ensure continuity of coverage. It also offers automatic additional insured status when required by written contract or agreement, as well as a provision that broadens the definition of “insured.”

Maximum limit of $5 million per occurrence and $5 million aggregate for each life of the clinical trial protocol policy, but R-T Specialty will provide additional capacity if necessary. A 25% discount is provided to OneBeacon's supplemental extended reporting period (SERP) if the insured decides to purchase at time of inception. Otherwise, clients can purchase a non-discounted SERP once the policy expires per policy terms and conditions. Minimum 10% earned premium in the event of policy cancellation. The program may include clinical trials medical payments coverage if requested.

Where available, OneBeacon’s affiliated carriers Homeland Insurance Co. of New York or Homeland Insurance Co. of Delaware underwrite policies.

MINIMUM PREMIUM: $3,500. May increase based on perceived clinical trial hazard.

TARGET: Lauer says the ideal prospect is a life-sciences company of almost any size that seeks to streamline its insurance renewal cycle and “wants a true global approach to its clinical trials coverage.” Coverage is available to contractors of clinical trials for humans, scientific advisory boards and vendors for designated activities in connection with a life science company's products, including medical sales consultant coverage.

COVERAGE TERRITORY: Anywhere for occurrences, as long as the suit is in the U.S. or its territories, and by endorsement anywhere in the world for suits and occurrence.

CONTACTS: Todd Lauer, vice president of medical technology; R-T Specialty; OneBeacon Technology Insurance, 601 Carlson Parkway, Suite 700, Minnetonka, MN 55305; 312-821-4742.

Ronimarie Acord is an IA contributor.