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Survey Report

Insurance Marketplace Realities 2021 – Life sciences product & professional liability

Cyber Risk Management

April 21, 2021

As the market stabilizes, COVID-19 exposures continue to lead the conversation.
Rate predictions
  Trend Range
Life sciences: Increase (Purple triangle pointing up) Flat to +10%, for most product classes

Key takeaway

With the overall market stable, COVID-19 exposures continue to dominate the conversation along with cybersecurity concerns over connected medical devices and the ability of traditional insurance products to adequately address such risks.

Life sciences companies remain focused on COVID-19 countermeasures.

  • With the dramatic increase in companies manufacturing, distributing and selling COVID-19 products in response to the pandemic, underwriters in the life sciences space are inundated with submissions. Coupled with a trend toward more detailed and diligent underwriting, turnaround times are longer than ever.
  • Those insureds with new COVID-19 products who are already in the life sciences space are viewed more favorably by underwriters than new entrants, given the likelihood of greater experience in dealing with the FDA.
  • Insureds should understand how the PREP Act and CARES Act may provide immunity from claims related to manufacturing, testing, developing and distributing their products, which are collectively called “covered countermeasures.”
  • Adherence to FDA, state and other guidance is critical, as are the contractual risk transfer provisions between parties collaborating on such products.
  • Insureds with any direct patient care will be carefully underwritten for potential transmission exposure and could see communicable disease exclusions.

The product and professional liability marketplace continues to be stable for life sciences buyers, with the majority of renewals resulting in moderate, single-digit rate increases. Those with unfavorable FDA interaction or litigated product classes continue to experience higher than average rate increases.

  • There has been no significant change in the overall capacity available for life sciences risks, and changes in appetite have been limited to a few carriers.
  • A handful of carriers have recently released new product liability policy forms, which, as always, should be carefully reviewed for nuances in coverage and reporting requirements.
  • Carriers are attaching exclusionary endorsements to product liability policies to eliminate ambiguity with respect to cyber liability. Carve-backs must be negotiated to preserve original coverage intent with respect to bodily injury and property damage.
  • Cybersecurity concerns surrounding connected medical devices and other mobile health technologies remain at the forefront. The intersection of product, professional and cyber liability for these risks requires thoughtful and coordinated program design. The insurance marketplace is struggling to evolve as quickly as the technologies being underwritten.

We include a broad range of subsectors under the category “life sciences:”

  • Pharmaceuticals and biotech
  • Generic pharmaceuticals
  • Medical device and technology
  • Nutraceuticals
  • Contract research organizations
  • Contract manufacturing organizations
  • Laboratory developed tests (including tests for COVID-19)


Willis Towers Watson hopes you found the general information provided in this publication informative and helpful. The information contained herein is not intended to constitute legal or other professional advice and should not be relied upon in lieu of consultation with your own legal advisors. In the event you would like more information regarding your insurance coverage, please do not hesitate to reach out to us. In North America, Willis Towers Watson offers insurance products through licensed subsidiaries of Willis North America Inc., including Willis Towers Watson Northeast Inc. (in the United States) and Willis Canada, Inc.

Each applicable policy of insurance must be reviewed to determine the extent, if any, of coverage for COVID-19. Coverage may vary depending on the jurisdiction and circumstances. For global client programs it is critical to consider all local operations and how policies may or may not include COVID-19 coverage. The information contained herein is not intended to constitute legal or other professional advice and should not be relied upon in lieu of consultation with your own legal and/or other professional advisors. Some of the information in this publication may be compiled by third party sources we consider to be reliable, however we do not guarantee and are not responsible for the accuracy of such information. We assume no duty in contract, tort, or otherwise in connection with this publication and expressly disclaim, to the fullest extent permitted by law, any liability in connection with this publication. Willis Towers Watson offers insurance-related services through its appropriately licensed entities in each jurisdiction in which it operates. COVID-19 is a rapidly evolving situation and changes are occurring frequently. Willis Towers Watson does not undertake to update the information included herein after the date of publication. Accordingly, readers should be aware that certain content may have changed since the date of this publication. Please reach out to the author or your Willis Towers Watson contact for more information.


Sandie Mullen
North American Broking Leader
Life Sciences

Denise N. Gordon, CIC, CRM
Specialty Broking Leader, Life Sciences

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