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Survey Report

Insurance Marketplace Realities 2021 – Life sciences

Cyber Risk Management

November 18, 2020

The pandemic is unlikely to have a significant impact on rates or terms in the immediate future, but many product liability claims may be coming.

Rate predictions

Rate predictions: Life Sciences
  Trend Range
Life Sciences: Increase (Purple triangle pointing up) Flat to +10%, higher for poor risks

Key takeaway

The pandemic is unlikely to have a significant impact on rates or coverage terms in the immediate future, but a potential onslaught of product liability claims may be on the horizon.

Life sciences companies are clearly in the COVID-19 spotlight.

  • 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 but who are already in the life sciences space are viewed more favorably by underwriters, 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 federal guidance is critical, as is the contractual risk transfer 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 is stable for life sciences buyers, with small, single-digit increases. Flat renewals may be available for clients with favorable loss experience, no recall activity and no products in multi-district litigation or class action.

  • Overall capacity remains stable for life sciences risks with a handful of new markets entering the space over the past several years. Except for certain high-hazard risks (e.g., orthopedic implants, opioids, other litigated classes), most insureds should have several carriers willing to offer terms.
  • Pharmaceutical and medical device manufacturers continue to be a target for product liability lawsuits, with social inflation leading to larger settlements and jury awards. The pandemic-related suspension of the courts has caused delays in looming opioid litigation, as well as other high-profile cases.
  • Product liability carriers are now adding exclusionary language for claims arising from or related to the actual or alleged presence of nitrosamines (NDMA and related carcinogenic contaminants). As nitrosamines can be found at safe levels in many food products, such as beer and bacon, the exclusion is of concern to pharmaceutical and nutraceutical manufacturers.
  • Standard markets continue to decline risks with CBD-related exposures, while non-admitted and wholesale-only carriers will typically offer terms.
  • Carriers continue to release new policy forms which should be carefully reviewed for nuances in coverage.

We include a broad range of subsectors under life sciences:

  • Pharmaceuticals and biotech
  • Generic pharmaceuticals
  • Medical device and technology
  • Nutraceuticals (including CBD products and energy drinks)
  • Contract research organizations
  • Contract manufacturing organizations
  • Laboratory developed tests

For a more in-depth marketplace review for the life sciences sector, read our recent publication.


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.


Sandie Mullen
North American Broking Leader
Life Sciences

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

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