3 Insurance Policies Biotech Can’t Go Without

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While biotech companies are transforming our day-to-day lives in areas like food and medicine, the progress they deliver carries substantial risk. Biotech risks have the potential to directly affect human health, which is why the industry as a whole is mindful when it comes to acquiring business insurance. But which types of insurance are biotech firms most likely to need?

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Product Liability Coverage

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Every biotech company needs coverage against claims related to its products’ safety and efficacy. Product liability insurance can protect not only against adverse reactions to a product but also claims that the product doesn’t work as intended. This can be especially helpful when a product recall is initiated or a company needs help covering recall related legal fees. Fortunately, the need for product liability coverage within biotech is well-known with new carriers consistently entering the market to cover new types of risk.

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Directors & Officers (D&O) Coverage

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D&O insurance exists because when biotech companies face legal claims, company directors are often specifically named as liable parties. Passing on D&O coverage can make it more difficult for executives to make decisions because they think they may be personally liable for adverse consequences. Biotech firms should provide an environment where executives don’t fear personal financial loss. Although not yet as widespread as product liability insurance, biotech firms should adopt D&O policies because of the highly regulated environment they operate in.

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Errors and Omissions (E&O) Coverage

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Whereas Product Liability covers the technologies, medicines, and inventions biotech companies introduce, E&O coverage is designed to cover claims related to errors in companies’ professional services. Biotech faces a higher risk of errors and omissions because of the complex, often years-long research and development cycles needed to bring new services to market. Much like D&O allows executives to operate freely, E&O coverage ensures research teams can innovate unfettered by the risk associated with their work. E&O insurance has a ways to go in terms of adoption and its significance as part of biotech risk mitigation.

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Risks Made Real

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The risks biotech companies face – both in the short and long term – make buying comprehensive business insurance a mission-critical project. Biotech companies have previously faced allegations of false claims that have resulted in lawsuits from customers, investors, and commercial partners. The presence of policies like product liability, D&O, and E&O can potentially save customers millions in legal fees or losses while also ensuring their long-term stability and relevance.

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Koop’s customer assurance platform helps tech companies seamlessly navigate the complexities of business insurance, regulatory compliance, and security automation in one place.

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We provide a comprehensive suite of insurance coverage that includes General Liability, Technology Errors & Omissions, Cyber Liability, and Management Liability coupled with the most cost-effective SOC 2 compliance certification on the market.

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‍Ready to learn more? Visit our website at https://www.koop.ai or drop us a note at hello@koop.ai.