Darwin launches new insurance cover for CROs

By Emilie Reymond

Insurance firm Darwin is targeting the booming contract research organisation (CRO) market by launching its own insurance cover designed specifically for companies or organisations involved in clinical research.

“We are excited to lead the charge with our innovative CRLI product, specifically designed to address the comprehensive array of exposures that are largely not currently being met by the insurance industry today,” said Steve Spina, vice president, medical professional and life sciences underwriting at Darwin.

The new specialty liability coverage, with clinical research liability insurance (CRLI) as a main feature, includes errors and omissions (E&O) and medical malpractice, administrative and regulatory defence coverage, billing-related proceedings coverage, public relations consultation as well as worldwide coverage.

Darwin offers standard primary limits of $1m (€800,000) and $3m, with limits as high as $10m.

For drug makers, CROs and universities who test pharmaceutical drugs, the potential for costly legal responsibility claims is very high and it is crucial for these companies to have right clinical trials liability insurance in addition to their general liability and products liability coverage, according to Glen Carlson, former vice president of US-based Calco Insurance Brokers.

Insurers have spotted the opportunity and a number of them, including Darwin, are now offering customised and dedicated insurance covers for companies running clinical trials.

“The targets of litigation are often the clinical investigators and research institutions that conducted the trials. Yet the companies that sponsor trials are also at risk when something goes wrong,” said Jill Wadlund, life sciences casualty manager at insurer Chubb, in a paper called “Heading off a clinical trial liability lawsuit.”

This was illustrated last year when CRO Parexel was at the centre of a drug trial disaster after six out of eight men it carried out Phase I trials on – under contract on behalf of small German biotech firm TeGenero – experienced a severe and systemic adverse reaction and were admitted to intensive care with hours of taking the experimental drug.

TeGenero had taken out an insurance policy of only £3m (€4.4m), to cover the trial and went bust shortly after the tragedy, while Parexel is currently in compensation negotiations with the lawyers representing four of the six victims, who told Outsourcing-Pharma.com in an earlier interview that Parexel had been on the brink of being sued.

Compiling the case against Parexel, the lawyers said they believed that the way that Parexel was involved in the design of the trial and how staff dealt with the drug reactions to TGN1412 was questionable and inadequate.

Meanwhile, Wadlund agrees that clinical trials liability insurance can help protect pharma companies from some of the risks associated with a liability lawsuit, however, she warns that firms with poor risk management practices may experience difficulty obtaining such cover, or may have to pay more for less protection.

“Pharmaceutical companies must take aggressive steps to make sure the clinical trials they sponsor are above reproach and to guard against even the appearance of conflicts of interest.”
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