Most of my blog posts are commentary on recent news and how insurance policies can impact the final outcome. For example, right now I could write about how the impending hurricanes could impact a company’s supply chain and describe how an insurance policy could protect your cash flow if a key supplier or customer is shut down. I am not going to do that in this post, but you should double check if you have a separate wind/windstorm deductible as it could impact coverage significantly.
Instead, I want to share an experience that happened last week while I was attending Boston Biotech Week. I was meeting with a prospect, an early stage company that was about to begin their first clinical trial, a 15 patient phase I trial at a single site. They gave me a history of the company, described their product and gave me an outline of their future ambitions. These are all important things to know because it helps when creating an insurance program. It is much better to put an insurance program together thoughtfully, laying out appropriate coverages and limits along with other coverage that might make sense either now or down the road. We may not put all coverage into place right away but at the very least knowing the economics sooner rather than later helps clients know what to expect. Putting a program together ad-hoc usually costs more and could lead to buying coverage that is not needed, which leads me back to the conversation I had with the prospect.
The prospect I met with last week was not proactive, instead they went ahead and signed a contract with an investigator that required they carry a limit of $10MM in clinical trial liability. Remember, this was a 15 patient Phase I study, and they had agreed to put into place $10MM in liability insurance. The first question I asked is whether there was any way they can get out of this requirement as that limit was excessive for a clinical study of that size. The second question is whether they had their insurance broker review the insurance section of the contract. Sadly, they could not get out of the requirement and they had run it by their broker. I am not sure which upset me more, the fact they could not get out of buying an insurance policy that was excessive or knowing that another broker would believe that a $10MM limit was appropriate.
As an insurance broker we benefit when you buy more insurance but I believe we benefit even more when we build trust and help you craft an insurance program in a way that saves you money and maximizes coverage, not by selling you more insurance just for the sake of it. As a broker that works with life science companies, a fair amount of them being pre-revenue, whatever I can do, no matter how small it might be, to get you closer to having a commercial product or being bought is what is most essential. The more I help you save money, negotiate advantageous contracts, protect cash flow or anything else that gets you closer to the finish line, the better off we will both be in the end.
To find out how I can help you, feel free to email me at firstname.lastname@example.org or call me at (610) 635-3326.