Marsh and Munich Re have launched non-damage business interruption insurance (NDBI) product that combines risk transfer and consulting services to assist life sciences companies in managing the impact of regulatory actions imposed by the U.S. Food and Drug Administration (FDA).
The FDA and its international counterparts are more closely scrutinizing life sciences companies today through planned and unplanned inspections to ensure current good manufacturing processes (cGMP) are being followed. When these inspections result in a suspension of manufacturing, whether voluntary or enforced, the resulting costs are not typically covered by traditional business interruption insurance policies since they are not the result of physical damage to the insured’s property.
Marsh and Munich Re said they developed NDBI Pharma IQ to fill this void. The policy offers life sciences companies that suspend their manufacturing and distribution due to a cGMP violation, up to $10 million in aggregate non-damage business interruption and extra expense coverage for up to 10 manufacturing locations, including those owned by third parties.
NDBI Pharma IQ includes complimentary risk assessment and quantification services supported by Marsh Risk Consulting’s forensic accounting, business continuity and property risk experts. Insureds are provided 60 hours of consulting services to aid in the assessment and management of their supply chain exposures to potential FDA regulatory actions.
NDBI Pharma IQ is only available through Marsh and Munich Re. Additional insurance capacity and consulting services are available as needed.
“A regulatory action that ultimately leads to an enforced suspension of manufacturing and distribution can cost life sciences company millions of dollars in remediation, reputational damage and lost income,” said Doug Carey, Marsh’s U.S. Life Sciences practice leader. “With NDBA Pharma IQ, these companies now have a cost-effective way to better assess and measure these risks and lessen the financial impact of a regulatory action so they can more quickly return to normal operations.”
Claudia Hasse, head of Special Enterprise Risks at Munich Re, said the cover was developed after “extensive research into the pharmaceutical industry and following many discussions with risk managers, whose needs have been reflected in the product offering.”
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