Medical Device Insurance
The medical device industry in the UK is heavily regulated. Legislation in the UK implements all of the EU directives regulating medical devices.
These directives are designed to benefit patients and users by setting out essential requirements that medical devices must meet. Medical devices must not compromise the health or safety of the patient, user or any other person. Any risks associated with the device are compatible with patient health and protection.
This means that any deviation from compliance and safety procedures could expose a business to unsustainable levels of risk. Therefore insurance is vital to offer protection to medical device companies against perils that may ultimately impact patient health and safety.
Insurance, however, can be difficult to find and when you find it, it can be very expensive. It is vital therefore to find an insurance broker that understands the market place. Also, more importantly, a broker with access to all of the insurers that are interested in providing the insurance that is required. This is essential especially for micro and/or start-up medical device companies as the cost of insurance can be a very significant hurdle. It’s only by partnering with an insurance broker, that understands the industry, that the most cost-effective solutions can be found.
Medical Device Insurance or Life Science Insurance?
Medical Device insurance is also referred to as Life Sciences by some insurers. This is the way in which they have chosen to market there product and is the same as medical device insurance. Life science and Biomedical is a product used by some insurers to cover the use of technology in medicine. The appetite for Life Sciences is the same as medical devices. We as your brokers will provide you with all the information you require regarding Life Sciences should you see this on a policy, but fundamentally it is just like any other medical device policy.
What do we do?
Here at ADF Insurance we understand that the insurance needs of medical device companies are unlike any other. Whether you’re a supplier or OEM in the orthopaedics industry, a biotechnology company or a medical device distributor or manufacturer, we understand that you need the broadest coverage for your specialty, with no liability gaps, at the lowest possible cost.
Medical devices cover a wide spectrum of products from medical consumables through to orthopaedic implants. Each of which possesses its own risk characteristics. We have a track record of arranging insurance for a wide range of medical devices. We understand the risks that are associated with each device. This is important when communicating information to underwriters to tailor a policy to your needs.
Based on a clear understanding of your medical device business, we will educate, inform and help you clarify your risks, identify your coverage needs and guide the development of customized policies and risk management programs specific to your company’s circumstances. We’ll provide you with a risk analysis that includes:
- A review of your company’s areas of potential exposure to risk,
- An audit and review of your current insurance contracts to ensure there are no gaps in cover,
- An assessment of whether your existing coverage and risk management techniques adequately address your needs,
- Special attention devoted to identifying any gaps in coverage that put your company at increased risk.
Insurance for medical device distributors or manufacturers can be arranged with on an individual class basis or via a commercial combined policy that includes:
Insurance that protects your property against all risks of physical loss or damage both here in the UK and anywhere around the world The types of property insurance we can arrange includes:
- Buildings insurance
- Contents/Machinery insurance
- Stock insurance
- Computer insurance
- Prototypes/models insurance
- Property in trust insurance
- Insurance for loss resulting from off premises utility failure
- Insurance for deterioration of perishable property
- Research records including the cost of recreating experiments
Insurance for clinical trials
In the UK a medical device manufacturer may need to carry out a clinical investigation (clinical trial) as part of the process of obtaining a CE marking for a medical device, i.e. to demonstrate that the device complies with the essential requirements of the relevant directive. For medicinal/ pharmaceutical products a manufacturer needs marketing authorisation before they can be sold. Trials are crucial to the wider medical community where results are absorbed by researchers, pharmacists, doctors and regulators to aid further product development and treatments. Read More >
Product withdrawal expenses
Where there is a risk of your product causing injury or damage to third parties the costs involved in recalling the product can be expensive.
We can arrange Products Liability cover to extend to include the cost of recall initiated or carried out to affected products likely to cause or having caused bodily injury or damage. Insurance cover for product withdrawal tends to be available with limits up to £250,000 and applies on a claims made or notified basis.
Loss of research and development funding or protecting your R&D
Research and development funding is essential in medical technology as the industry is highly innovative with new start up companies continually entering the sector and existing companies constantly looking to enhance existing products and develop new products.
What happens if your business suffers a significant loss at your main premises for example a fire, and everything is destroyed? Your property insurance will replace the bricks and mortar, equipment, tools and even cover a reduction in turnover as result of a business interruption. But what about if the product is not in production, it is only partly developed and you are waiting for the final instalment of funding to come through. Will your insurance provide any protection?
Research and development insurance is essential to ensure that the funding is protected as standard business interruption policies will not respond in these circumstances. With traditional business interruption coverage the trigger for a loss is a reduction in revenue or profit but in the example above, this would be absent.
For those companies who are involved in research and development activities, they will not be receiving any profit or revenue therefore in the event of an insured loss, there will be no cover for the money they have expanded on research and development or for income they have received (and spent) as funding. Loss of market share could be disastrous if the product does not reach its timelines therefore protection of property is key.
In order for companies to benefit from protection under their insurance they should consider having a separate section for research and development under their property damage / business interruption policy which will include cover for;
- Committed costs
- Additional increased cost of working
- Increased cost of working
Product Liability for Medical Devices
Product liability insurance is crucial for any medical device company. In many cases it is also the most difficult to find for many medical device companies and can represent the largest part of your overall insurance spend.
The extent of product liability will differ dependent on whether you are designer, distributor or manufacturer of medical devices. Notwithstanding this it forms a crucial part of your insurance protection and will be a requirement when trading with the NHS.
If you are a designer and retain the IP but outsource the manufacturing element to a third party you will still have a potential product liability for any underlying defects in the design of your device. Additionally a products liability policy will act as a defence mechanism in the event that your business is brought into any joint actions.
As a distributor of medical devices you will be required to have products liability insurance. Your business will be the first port of call for actions following potential claims and therefore it is important you have suitable product liability insurance in place.
The extent of products liability will be dependent on any re branding or repackaging, installation, marketing and technical support undertaken by a distributor of medical devices. In addition Insurers will expect full rights of recourse against manufacturers so any provision within a contract that prevents this must be disclosed to an insurer.
Insurers will always ask where devices are sourced from as the right of recourse against manufacturers based in certain countries is more difficult indeed sometimes impossible. It’s important to be able to provide as much detail as possible regarding the manufacturer’s experience, accreditations (eg ISO 13485) and also written evidence that a right of recourse is in place.
Unless some elements of the manufacturing process are outsourced full liability is retained by the manufacturing company. It’s vital when dealing with underwriters that they have a full understand of all of the processes involved and the steps in place to ensure quality remains at the required level.
Insurers will expect full adherence to the industry regulatory guidelines governing classification of your product, all quality and technical documentation review and adherence to the relevant European directive.
Insurers will review all areas of safety including biological, clinical data, electrical, electromagnetic compatibility, labeling and instructions, risk management and sterilization.
Also underwriters will want to understand the procedures for adverse incident reporting.
Other key considerations for products liability in all cases will be
Exports to USA/Canada
Due to the increased litigious culture associated with USA & Canada many insurers are simply not prepared to entertain exports to these territories. It’s vital therefore that any actual or planned sales are disclosed to ensure that your insurer is happy to provide
C E Marking requires that devices are fit for their intended purpose. It’s important therefore that product liability insurance is extended to include liability arising out of a failure to meet its intended purpose as standard wordings do not include it.
We can arrange professional indemnity insurance for medical professionals that provide either healthcare advice or clinical research services.
Due to the variety and complexity of the problems that medical professionals face every day it is vital that you have the right insurance cover. In addition with compensation awards increasing year on year professional indemnity cover has never been more important.
At ADF Insurance we are able to arrange professional indemnity insurance for medical professionals with insurers that have an experience within the medical industry and are able to offer you the support and protection you need. Read More >
Medical Device Consultants
If you are acting freelance on behalf of medical device manufacturers provided in theatre technical support to surgeons it’s vital that you have the correct insurance in place. By the very nature of the environment you work the potential impact to your business should anything go wrong is significant. Simply being brought into an action from a disgruntled patient even if you are ultimately not culpable can be a lengthy and expensive process.
Careful consideration of the contractual relationship between you and the medical device manufacturer is vital to understand the extent that you could be involved in the event of any action from a patient. This will have a direct impact on your insurance requirements as it may mean that you are required to buy both professional indemnity and product liability insurance.