Rate predictions
| Trend | Range | |
|---|---|---|
| Life Sciences: |  |
Flat to +10% for favorable risks |
Key takeaway
The life sciences product/completed operations and errors & omissions marketplace continues to be stable for both the primary and excess layers.
Coverage
- With the explosion of cyber-related claims, life science carriers are adding endorsements to affirmatively exclude cyber coverage. Entities that manufacture cyber-connected medical device products should confirm that their exposures are covered under their cyber program.
- Primary rate increases are in the single digits for most buyers with favorable loss experience, no recalls and no products in multidistrict litigation or class action.
- Excess layers typically follow the primary regarding rate increases.
- Underwriters are hesitant to offer terms and, in some cases, even analyze a submission on programs that are repeatedly marketed year after year. Thorough and detailed submissions remain a critical component of a successful placement.
Capacity
- Overall capacity remains stable for life science risks, with a handful of new markets entering the space over the past several years.
- Some carriers have decreased the limits they will offer on certain classes, including implantable devices and COVID products/clinical trials.
- Select carriers are declining to offer cover for clinical research organizations conducting COVID trials when they are also covering the manufacturer of the product.
- Except for certain high-hazard risks (i.e., orthopedic implants, opioids, mesh and other litigated classes), those insureds with a favorable loss history should find several carriers willing to offer terms.
Claims and litigation
- The suspension of the courts caused delays in the looming opioid litigation, although there has been some movement recently as courts become accustomed to operating virtually.
- Social inflation continues to impact settlement amounts and jury awards, leading to larger payouts.
- The upward trend in third-party litigation funding continues to increase litigation costs and arguably influences outcomes.
Coverage considerations
- Carriers continue to release new policy forms, which should be carefully reviewed for nuances in coverage.
- Standard carriers continue to decline risks containing CBD-related products, while some non-admitted and wholesale-only carriers will offer terms.
- The FDA continues to monitor products for impurities, leading to product recalls (most recently a smoking-cessation drug and various sunscreen products). Recall coverage within product liability programs is very limited and stand-alone cover should be considered.
Subsectors include
- Pharmaceuticals and biotech
- Generic pharmaceuticals
- Medical device and technology
- Nutraceuticals (including CBD products and energy drinks)
- Contract research organizations
- Laboratories offering customized test kits under their label
- Contract manufacturing organizations
